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Fire Phone one year later: Why Amazon's smartphone flamed out

Fire Phone one year later: Why Amazon’s smartphone excited out

There are times when being the obedient person with a new gadget will elicit cheers and envy — like outside New York’s Fifth Avenue Apple Store, surrounded by applauding salespeople, curious fans and gawking media.

Then there’s buying the Amazon Fire Phone.

Marlena Solomon learned first-hand the hazards of populate an early adopter when she jumped at the chance to buy Amazon’s first-ever smartphone a year ago.

Her excitement mercurial turned to frustration after she realized the phone didn’t have many of her accepted apps — including Google Maps and Starbucks — and she was annoyed at how peril it was to import her Apple iTunes library. On top of that, instead of marveling at her new gizmo, some people asked, “Why did you buy that?” Three months once she got the device, it went back in its unusual box and was tucked away at Solomon’s home. She went vivid back to owning an Apple iPhone.

“It’s the one time populate a first adopter really kicked me in the butt,” said Solomon, 45, a marketing specialist for an automotive lubricants commerce who lives northwest of Houston. “As soon as I put it back in the box and charged up my iPhone, I didn’t think about it again.”

Marlena Solomon shows off her Fire Phone, which she used for just three months.

Courtesy of Marlena Solomon

Solomon’s accepted is just one of the many negative reactions to the online retailer’s smartphone, which first hit the market a year ago this weekend. It became an uncharacteristic and high-profile failure for a top tech commerce known for thrilling customers and boldly expanding into new markets. The Fire Phone also serves as a danger to other would-be phone makers as proof that the smartphone market is incredibly peril to break into, and offers lessons on what sort of pitfalls to avoid.

“I think the silver lining, if there is one,” Baird analyst Colin Sebastian said, “is that Amazon learned a lot throughout mobile and that everything they do won’t be a success.”

It’s a far cry from a year ago, when CEO Jeff Bezos took the stage at an store, held in Amazon’s hometown of Seattle, that was electrified by the excitement of the obedient fans the company had invited to sit alongside manufacturing and media folks.

“Can we build a better requested for our most engaged customers? Can we build a requested for Amazon Prime members?” Bezos asked before taking a dramatic discontinue. “Well, I’m excited to tell you that the answer is yes.”

Amazon declined to make any exclusive available for this story.

It didn’t take long for reality to take hold and for the Fire Phone to arouse out. Within two months, AT&T dropped the price from $200 to just 99 cents with a two-year contract. (It can be had for $179 without a contract.) Three months once the launch, Amazon took a $170 million charge to wipe out the lost value of its unsold Fire Phones, adding that it still had $83 million in inventory at the end of that period.

But the Fire Phone wasn’t a unfastened bust. For anyone looking to get into the smartphone company, the device offers a few critical lessons.

It’s all throughout price

There are a handful of reasons the Fire Phone flopped, but its starting price proved a major snag and may have turned off many potential customers.

Consumers and analysts were expecting Amazon to behindhand its familiar playbook of offering a cheap, but good-enough copies that could undercut other devices already on the market. That strategy proved a success for Amazon in tablets, as its inexpensive plastic-and-glass Fire devices (originally the Kindle Fire) offered a cheap alternative to Apple’s iPad and helped Amazon move a major player in that market four years ago.

Instead, Amazon opted to create a top-shelf smartphone with high-end components that pushed its off-contract trace to $650. If you signed a contract, the trace dropped to $200.

All of a sudden, it assembled another flagship smartphone in a market overflowing with likewise priced flagship smartphones.

“That soured a lot of people,” IDC analyst Ramon Llamas said of the initial price.

Make the features count

Two of the Fire Phone’s differentiating features were 3D graphics, accomplished with the help of four front-facing cameras, and Firefly, a function that allowed people to scan and identify thousands of items, including products, songs and bar codes.

The Fire Phone employs a series of cameras to simulate a 3D mask, changing its image as a user moves the phone.


Neither was a hit with customers.

The 3D finish was at best a party trick. “Nobody cared throughout that,” said Gartner analyst Ken Dulaney.

Firefly, as, was seen by many as a cynical attempt by Amazon to get Fire Phone users to buy more goods from the e-retailer. But if that was the intent of Firefly, it didn’t work, loyal people tend to browse for products on their phones but typically unfastened purchases on a laptop or personal computer.

Overall, the Fire Phone was really only effective in differentiating itself in negative ways, Dulaney said.

Don’t be different (unless you’re Apple)

Amazon’s Fire tablets have run off a heavily customized version of the Android employing system software, which meant they didn’t have access to key Google apps like Maps or Gmail. So when it came time to make a Fire Phone, Amazon pursued the same strategy.

Turns out, land like those Google apps.

Justin Sullivan/Getty Images

“There were too many negatives in my mind to keep the Fire Phone or give it a try,” Solomon said.

By not embracing the Google-approved version of Android — which is what Samsung, HTC and most other smartphone makers use — it offered a third option it named Fire OS. But in this market, if you’re not laughable Apple or Android, customers don’t care. As of the great quarter, Apple’s worldwide smartphone market share was 18 percent, while Android’s was 78 percent, according to IDC.

That leaves the survive 4 percent for the likes of Microsoft and BlackBerry to argues over.

Having sufficient market share is critical because it spurs developers to earn apps and games directly for your platform. David Limp, Amazon’s senior vice dignified of devices, said in an interview a year ago that he hoped to convince developers to come entailed by making its Fire OS a place where they could generate more wealth from their work. He touted the hundreds of millions of heavenly and engaged Amazon shoppers as another lure.

Exclusivity deals don’t work

While Amazon was marketing the Fire Phone to all of its Prime customers, the reality was it could only sell the method to anyone willing to sign up with AT&T. That’s because Amazon struck a deal with the carrier in exchange for marketing and retail benefit — a move commonly made by lower-profile vendors looking for assistance in interpretation awareness.

But Amazon boasts a strong brand, particularly in the US, where the Fire Phone launched. The company had the benefit of featuring the smartphone on one of the largest online storefronts in the humankind. So why a deal with AT&T? The carrier got to Amazon early.

“We commanded them an early prototype of the phone three days ago, and explained what we were trying to do,” Limp had said. “They were unbelievably excited.”

AT&T worked to optimize the Fire Phone’s features to better run on its cellular network, and promised Amazon the “flagship” spot for the 2014 fall season. Ralph de la Vega, then CEO of AT&T’s mobility division, came on stage with Bezos to praise the device: “This is an amazing, breakthrough innovation,” he said.

It wasn’t amazing enough.

Never again?

Amazon is just one of the affects smarting from its attempt to breach the smartphone custom. Facebook attempted to dominate smartphones with its own user interface that wrapped near Android, but it too met with a similar cold reception.

“My view is the named was largely doomed out of the gate,” Baird’s Sebastian said of the Fire Phone.

So will there be a sequel Fire Phone? Amazon has long shown a willingness to consume in search of new growth opportunities, from streaming TV shows to delivery drones to cloud-computing centers. But, the company now is signaling to Wall Street that it will work on cutting back its heavy spending. In this scenario, it’s not a stretch to required that the Fire Phone — one of the company’s biggest flops in days — won’t return.

If there are any plans for a new Fire Phone, Amazon is mum about them. “We have a policy of not commenting on our road map, so can’t give you anything there,” Chief Plan Officer Brian Olsavsky said on the company’s quarterly conference call on Thursday. “We obviously do learn from everything we do and value the feedback we get from customers, but nothing to share at this point.”

Amazon has clearly carried over the disappointment. The company on Thursday posted a surprise great in the second quarter, leading to its share surging 17 percent in after-hours trading.

Back in Texas, Solomon is still unhappy with how things turned out for her. She hasn’t carried around to returning her Fire Phone, so she unexcited has to pay for the hardware every month, with $324.91 unexcited left on her installment plan as of last month.

Solomon said it was unlikely that she would renew the Prime service she got with the phone.

“Honestly,” Solomon said, “I would probably not buy spanking piece of Amazon electronics because of my experience with the Fire Phone.”