Amazon owns up to Fire Phone failure, blames pricing

They say it takes guts to admit to one’s mistakes, and Amazon is certainly showing it has some. David Limp, the company’s Senior Vice President for Devices has publicly admitted that the company fumbled and bumbled on its first Fire Phone, but it is putting the blame squarely on price tags only. And even with that minor, if you could call $170 million “minor”, miscalculation, the company isn’t ready to throw in the towel and will continue to iterate over the smartphoe until it gets it just right.

This latest Amazon exec revelation came after the company’s earnings call that also revealed a great loss due to the lackuster performance of the Fire Phone in the market. It just didn’t catch fire, pardon the pun. Despite some rather superficial gimmicks and tie-in with Amazon’s ecosystem, the company’s first smartphone proved to be exponentially less impressive than speculations and rumors would have us believed. Limp boiled down the problem to one of price. Instead of the extremely affordable prices that Amazon’s devices were known for, the company took the standard route and offered the Fire Phone for $199 with a two-year contract, exclusive to AT&T.

While price, and perhaps even exclusivity, might have indeed been a factor, it isn’t the only reason for the rather cold reception to the Fire Phone. As Limp himself said, it was a case of mismatched expectations. Of course, Amazon can hardly be blamed if the public expected its first smartphone to be the next best thing since the invention of the wheel, but it didn’t do anything to set expectations straight either. The fact that the initial performance of the device itself was quite wanting plus the fact it felt like a device looking for a vision didn’t help matters either. Of course, those aren’t reasons to call it quits, at least according to Amazon.

The company has been rather relentless, almost bullish, about its devices, which has resulted in the success of its e-readers and tablets, initially considered by the public to be failed ventures. Amazon believes in its Fire Phone vision and it isn’t about to give up so quickly. Prices have been slashed down to as much as $1 with that same two-year contract. Firmware updates have noticeably improved performance and features. And there will be more to come, says Limp. At least, as far as software updates are concerned. Whether there will be new Fire Phones in the future is something still in the realm of speculation and expectation.

SOURCE: Fortune
VIA: SlashGear