Amazon at one time had a promising future in the smartphone device business. They released the Fire Phone and things looked promising. Originally, the device sold for $199 with a 2-year contract and $649 off-contract. That was then though, and this is now.
Since then, the company noted in their last quarterly earnings report that sales were trailing off badly for the company, and that they needed to take more aggressive action to correct the growing concern that Amazon would ultimately be sitting on millions of devices, and selling none of them.
Now, Amazon is offering the Fire Phone for just $199 without a contract. Even better, the company isn’t bailing on the one-year subscription to Amazon Prime with a purchase of a Fire Phone. While Amazon is arguing that the pricing is only temporary – citing that the company will only run this promotion through Cyber Monday – it remains to be seen what the company will do moving forward with their phone business.
One of the reasons why so many, including Amazon themselves, have argued that the Fire Phone was a complete and utter failure was the pricing of the device. They admitted openly that they got it wrong when they first launched the device – and even in September, when they cut the price back to $449 off-contract and just $0.99 with a two-year contract, it still remained over-priced for many.
Right now, the company is undoubtedly sitting on a ton of Fire Phone devices, but the truth is that Amazon doesn’t seem to be backing off of their smartphone business. Specifically, reports point to as many as $83 million worth of Fire Phone devices that are unsold. Amazon’s willingness to assert blame to the pricing, and not the functionality of the phone – which doesn’t vary a lot from an Android smartphone.
It would appear as though Amazon has no fear at what the future may hold for their smartphone business, but if another device performed as badly as their previous Fire Phone did perform, then the company would likely reconsider the line entirely and possibly go in an entirely different direction.