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Amazon Exec Admits The Fire Phone Pricing Was A Mistake

October 31, 2014 - Written By John Anon

To say the Amazon Fire Phone has had a bumpy ride so far would be a gross understatement. The Fire Phone was only released in July of this year and by many is already being slated as a flop. If you think differently then you should be aware that only recently Amazon announced they were sitting on $83 million worth of stock. In short, Fire Phones. To add to this Amazon also recently announced they were looking at costs in excess of $170 million which is largely believed to be in association with launching the Fire Phone. In terms of units, after only four weeks a report by Chitika (who measure internet traffic) was suggesting as little as 35,000 units had been sold. While only two weeks ago a report by CIRP suggest Fire Phone ownership was practically non-existent with Amazon owning 0% market share.

So why was the Fire Phone such a disappointment? Well, one of the main reasons being touted for its failure was the cost at launch. Back when the device hit the market Amazon priced the Fire Phone for the high on-contract price of £199.99 for the 32GB variant (and $299.99 for the 64GB). Although this is within the range of what most flagship devices are priced, the Fire Phone (albeit a high spec device) was untested, untried and had no market evidence to back up such a price. As such it was not a surprise when after only eight weeks the price of the on-contract Fire Phone dropped from $199.99 to 99 cents. That sort of price drop after only eight weeks is evidence enough that Amazon accept the failure of the Fire Phone. That said, if you are still in doubt, then it seems Amazon have now officially announced that they know they failed.

In an interview with Fortune published today, Amazon’s Senior Vice President David Limp admitted that Amazon got the pricing of the Fire Phone wrong. During the interview Limp admitted “We didn’t get the price right“. Further adding “I think people come to expect a great value, and we sort of mismatched expectations“. Limp also referenced how dropping the price form $199.99 to 99 cents was not only a price adjustment, but also admittance of the Fire Phone’s mispricing “”we missed, and so we corrected“. Of course, now it almost seems inevitable that even with the price drop and the admittance from Amazon’s powers-that-be, the Fire Phone is still on-course for failure. Limp did also state that since the price drop they had seen significantly better sales. Although in reality how could they have been worse. In terms of the future of the Fire Phone, Limp simply stated that they will continue to update and improve software features. Ultimately ending his comments “beyond that, I leave it out there to see what people think“. What do you think about the mis-pricing of the Fire Phone? Now that it is cheaper are you more inclined to give it a try. let us know what you think.