Amazon’s Fire Phone made news this week with the backstory of why the phone flopped, and Amazon’s plans to reorganize the hardware group, Lab126, responsible for the smartphone. Now the retailer is trying again to clear the shelves of this device, selling the Fire Phone today for $189, off contract, including a year of Amazon Prime (normally $99). This is not the first fire sale (sorry) for the beleaguered smartphone, either – in November 2014, Amazon began retailing the phones for $199 unlocked. And that followed the drop to $0.99 with a two-year agreement with AT&T, down from the $199 on-contract price.
Before the sales, an unlocked Fire Phone cost $449.00.
The 32 GB Fire Phone on sale now for $189 includes a 4.7-inch HD display, a 13 MP camera, 2.2 GHz quad-core processor, 2 GB of RAM, and a full year of Prime benefits, including free, unlimited photo storage. The phone, however, is GSM-only, meaning it works in the U.S. on AT&T and T-Mobile but not on CDMA networks like Verizon and Spirit.
The phone is listed at $189 as one of Amazon’s daily deals, meaning that its price could creep back up when the sale ends.
At $189, the phone is still not cheap, but when you consider that you’d otherwise pay $99 for a year of Prime, the price point becomes more attractive.
Amazon’s phone failed because it didn’t play to the company’s strengths – customers expected something more basic, and more affordable. But instead, Amazon sought to enter the market with a high-end device, also charging a higher price because of the R&D that went into some of its features’ creation, like the glasses-free 3D effects, called Dynamic Perspective. The phone was reportedly CEO Jeff Bezos’ baby, with insiders telling Fast Company that he essentially served as product manager on the device, making decisions on everything from hardware to software. People listened or bit their tongues, because Bezos’ appetite for risk usually pays off.
The goal with Fire Phone was to offer differentiated hardware with “blockbuster” features that could justify the cost of the phone, producing higher margins, and encourage consumers to switch from their iOS or Android devices. But unfortunately for Amazon, consumers found much of its feature set gimmicky – or worse, annoying and distracting. More importantly, Amazon got the price wrong. The company sold only tens of thousands of devices, ultimately taking a $170 million write-down.