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Amazon Not Scared at Failure of Fire Phone, Hints at “Second Step”

by Todd Haselton | November 6, 2014

Amazon’s Fire Phone wasn’t a success. In fact, some analysts pegged sales at just 35,000 units sold, and the company confirmed last month that it’s sitting on $83 million worth of Fire Phone units and that the phone forced it to take a $170 million writedown last quarter. Amazon has admitted that it made mistakes with the Fire Phone launch, including the price point, which consumers had expected would have been more of a value play, similar to how Amazon sells in Fire tablets. Now, speaking with the Guardian, Amazon vice president of devices in Europe, Jorrit Van der Meulen, discussed what Amazon has learned from the Fire Phone, and even hints a second model is indeed in the works.

“In an honest assessment of the Fire Phone, we’ve learned a lot on this one,” Van der Meulen told the Guardian. “We’re undeterred, but we’re not immune to the criticism either. We certainly read everything that’s written from customers to journalists and take note, so might the second step be slightly different than our first step, sure. I suspect that it will be.”

The executive said this isn’t the first time Amazon has run into this sort of situation. In fact, he argues that Amazon experienced the same criticism with its first Kindle but that it kept pushing and investing, despite “lumps along the way.” The goal is to continue to sell devices to consumers and to then make money when “consumers use devices,” instead of at the point of sale. That’s a strategy Amazon has also applied to its tablets and eReaders, which allows it to present a low up-front cost to consumers and then generate revenue when consumers spend money on goods like music, movies, books, and items on Amazon’s site.

What will Amazon change next time around? We hope it considers releasing its next Fire phone off contract and free from any carrier exclusivity. Perhaps, then, it will have more of a fighting chance.

The Guardian Re/Code

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Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...