Amazon just made its earnings conference call today and things are not looking good for the retailer giant. The company reported a staggering third quarter loss of $544 million, compared to last year's loss of $25 million from the same quarter. And the culprit? Both surprisingly and unsurprisingly, it is the Fire Phone that is to blame, at least according to some company reps. The rather eccentric smartphone has apparently cost Amazon a $170 million writedown in addition to supplier commitment costs.
Very few really expected the Amazon Fire Phone to be a phenomenal trailblazer, like say, an iPhone or a Samsung Galaxy, But it's still quite surprising to learn that it performed that terribly in the market. It's not like Amazon is a newborn babe when it comes to mobile devices, granted smartphones are on a slightly different ballpark from tablets and ereaders. And it's not like the device itself is an underdog, sporting your basic set of hardware that make up any high-end smartphone, at least during its launch. So what happened?
Many would be quick to pin the blame on the Fire Phone's exclusivity to one and only one carrier. If you're a more established and highly popular smartphone maker, perhaps you can afford to shut out others from your device. But when you're just starting out, getting in bed with only one, even if it's AT&T, might pose some adoption problems that will remain even if you bring down the price to just one US dollar.
But perhaps the biggest problem of the Fire Phone is one of purpose. Amazon's other devices are laser-focused on a particular use case and that is where they perform best. The Fire Phone, not so much. As a smartphone, yes it does good, but so do other models as well. As an reading device, perhaps not so much. The Fire Phone was also billed to be intimately tied to Amazon's other business: selling products. But as much as people love to shop, having a dedicated smartphone just for that may not make much sense. The Fire Phone also has other notable features, especially the Dynamic Perspective, but these are all fancy gimmicks that sugar coat the device's lack of a vision.
Do you own a Fire Phone or have you dreamed of getting one yourself? Any thoughts on this development?