Amazon exec: Fire phone pricing was 'wrong'
Top Amazon executive David Limp has admitted the Fire smartphone didn't match Amazon's lofty ideas, and says the price of the device was "wrong."
Last week, the online retail giant released third-quarter financial results which fell far short of expectations. The Seattle-based firm reported a net loss of $437 million, and Amazon CTO Tom Szkutak disclosed the firm took a $170 million charge "primarily related to Fire phone inventory valuation and supplier commitment costs."
In other words, sales of the Fire flop have been poor, and approximately $83 million in smartphone stock remains unsold -- despite an eventual price drop to 99 cents in the United States.
Speaking to Fortune, Amazon's senior vice president of devices David Limp admitted the company "didn't get the price right," and may have failed to meet customer expectations of the company. Limp said:
I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we're also willing to say, 'we missed.' And so we corrected.
The Amazon Fire Phone originally retailed as a 32GB model for $199 and 64GB model for $299 — standard pricing in the industry. However, Amazon may have shot itself in the foot by failing to undercut rivals in the mobile device industry — as the company is known for offering lower prices for items online.
If you view reviews of the smartphone on Amazon's website, customers have complained of a myriad of problems, including a lack of apps, overheating and poor battery life.
Limp says that updates have erased a number of problems, but poor sales speak volumes — especially in a highly competitive field like mobility. This does not mean, however, Amazon is retreating from the fight to gain a loyal mobile following — especially as other mobile devices, including the Fire tablet, have done well.
"We are going to keep iterating software features to get it better and better," said Limp. "Each release that we're doing, we’re learning. Beyond that, I leave it out there to see what people think."
Earlier this week, the online retail giant acquired online comedy service Rooftop Media in order to gain fresh content and subscriber networks.
Read on: In the enterprise
- The working visa: A tricky subject for technology companies
- EU to probe Amazon over Luxembourg tax deal
- Google lures startups to cloud following with $100,000 credit
- EBay, PayPal to split into two separately traded companies
- Lenovo, VMware partner to provide data center solutions
- The weak link in the enterprise security chain: Falling for phishing