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The Reason Amazon’s Fire Phone Is So Expensive Is Obvious

by Brandon Russell | July 28, 2014July 28, 2014 1:30 pm PST

The success of Amazon’s first Kindle Fire tablet boiled down to a few things: services and price. Customers got access to the company’s immense storefront, while first-time buyers were able to get a tablet for a bottom-dollar price. Unfortunately, that’s about the opposite for its new Fire Phone, which comes in at $200 on contract (or $650 outright).

The pricing is a definite shocker, especially considering the company’s more aggressive strategy in the past. Not only that, but some of today’s best handsets are priced similarly, or in some cases cheaper. A new teardown reveals why Amazon, which we have to remember is a business, went the more expensive route.

According to a teardown from research firm IHS, the Amazon Fire Phone costs $205 to build—more than you’d pay (subsidized) with a two-year contract. Unsurprisingly, the device’s Dynamic Perspective is allegedly the main money pit; in fact, Amazon’s insistence to introduce the feature may have caused the company to make cuts elsewhere, which is likely why we only see a 720p display, and not Full HD.

It’s not always about specs, though, so the Fire Phone could still be good without the latest and greatest. However, our early impressions haven’t been overly favorable, making the high-ish price tag even harder to swallow. Dynamic Perspective is cool at first, but it never serves any real benefit. So was the extra cost of the feature worth it? It appears the answer to that is no.

“Amazon has sunk a lot of research and development money into this phone,” said Andrew Rassweiler, an IHS analyst who spoke to Re/code. “The only way Amazon will make that back is by selling a lot of them.”

With the M8, G3, S5 and even the OnePlus One all available, it seems unlikely the device will enjoy enough success to make the device worth it. But many people said the same thing about its Kindle Fire lineup, but now they’re among the better options available.


Brandon Russell

Brandon Russell enjoys writing about technology and entertainment. When he's not watching Back to the Future, you can find him on a hike or watching...