Amazon is taking the long view on the Fire phone, despite poor early sales, a huge price cut and $83 million in surplus inventory that resulted in a $170 million charge for the excess hardware and supplier costs combined. Amazon’s SVP of Devices David Limp told Fortune the big issue was a miscalculation on pricing, which later resulted in Amazon slashing the price of the device from $199 on contract to just 99 cents.
Limp said that the Fire phone is selling better post-price cut than it had been before, by a significant margin, though as usual Amazon declined to share any actual numbers. The SVP also pointed to software improvements that have addressed a lot of early customer complaints about the device. The plan is to continue to release software improvements for this generation of device, and Limp says they’re looking at the Fire phone as similar in trajectory to the Kindle.
Amazon’s first Kindle had a lot of kinks that left reviewers unimpressed. Compared to the current generation of device’s, it was a largely uninspiring mess that few would’ve pegged for continued survival. The Fire phone, likewise, has analysts and press proclaiming its demise. But Amazon can likely stick out a few generations of Fire phone in the interest of finding a better formula that customers will respond to. This generation was too focused on building a funnel for Amazon’s shopping experiences, and future devices will probably strike a better balance.