Why did the Amazon Fire Phone Fail?
What is Amazon Fire Phone?
Launched in the year 2014, Amazon Fire Phone was developed by Amazon as a way to enter the smartphone market. This came after their product, Kindle Fire Tablets, which was a huge success in the market. For Amazon, it was entering a market which was dominated by Apple, Samsung and other smartphone brands in 2014.
What did Amazon Fire Phone offer?
The features of the phone were as follows:
A 3-D display
A 2.2-GHz quadcore processor
A 13-megapixel rear-facing camera
2 GB RAM
The device was focused on multimedia, and even offered unlimited photo storage. The camera even had a special button to launch the camera app of the phone. It was sold exclusively on the AT&T network.
32-GB version with a two-year contract
64-GB version with a two-year contract
Apart from that, Amazon also offered its exclusive Amazon Prime membership for a year for free. If the customer was already an Amazon Prime member, they would get an additional year of the Amazon Prime membership for free.
The customers could purchase the phone directly from Amazon’s website. The phone also had Amazon’s Instant Video service and Amazon’s music-streaming service preinstalled on the device. The apps on the Fire Phone were supported on a modified version of Android called Fire OS. There were a couple of unique features as well:
The phone had a new exclusive feature, called the Firefly. It allowed customers to scan literally anything (objects, songs, TV Shows), so that the app could identify it and offered the customers a way to purchase it from the Amazon store.
The phone also offered something called the Dynamic Perspective. In this feature, there were four cameras on the front screen. This feature could track a person’s head movements during the phone’s use. This allowed the user to view the contents of the screen in a 3-D way.
The “Mayday” Feature
A Mayday feature was also given in the phone, to get instant assistance from the Amazon’s support team.
Why did Amazon Fire Phone Fail?
The reasons which contributed to the product failure are as follows:
The price played a big role in the phone being unsuccessful. Generally, Amazon, while entering a particular market, would price its product in a cost effective way to capture the market. They played the same strategy for its other Kindle Fire devices but with Amazon Fire Phone, it was different. The phone was priced comparable to the phones available in the market. If we purchased the phone without the contract the price of the phone was $650 but if we purchased the phone with the contract it cost $200. The customers did not see a value in the price point, because it really didn’t offer a groundbreaking feature for the price.
Features of the Fire Phone
There were two special features introduced in the Fire Phone, the 3D Dynamic Perspective and the Firefly. The features did not really click with the customers who purchased the device. Typically, the customers tend to browse the products on the phone, but use laptops/computers to purchase the selected items. This went against the features and did not click with the customers of the Fire Phone.
Lack of other Apps
The Fire Phone did not have access to widely used apps such as Google Maps or GMail. This was in line with the previous strategy of Amazon in which the company did not include these apps in the Kindle devices, which was overall okay given the purpose of the tablets was to primarily read.
The second thing was the phone used a modified version of Android, called Fire OS. But at the time of the launch, Android and iOS market share together was 96%. The rest of the 4% was for the rest of the operating systems, like Microsoft and Blackberry.
This limits the developers also from making applications for the platform on a large scale.
AT&T Only Service
Amazon made a deal with the carrier AT&T and asked its customers to sign up with AT&T in order to use the phone. That was seen as a barrier, because instead of aiming at their existing prime customers, they added another issue of choosing the carrier for the phone as AT&T.
Amazon eventually took a $170 million loss on the Fire Phone. The product was not seen as a revolutionary product that Amazon had to offer. Rather, people viewed this product as a mere extension of their store. The phone’s price was eventually discounted to a price of 99 cents in just two months. It was argued that to truly compete in an Apple and Android smartphone dominating market, the product to be launched had to be truly groundbreaking, both in terms of the hardware and the software. This, however, could not be fulfilled by the Amazon Fire Phone in 2014. All in all, it is a good example of how even the largest companies in the world may fail to create a product which is widely successful. In the future, we may see a whole new version of the Fire Phone considering how much Amazon has advanced in its technology.
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