Amazon loses $544 million in Q3 after Fire Phone failure

[Scorpus]

It's pretty well established now that the Amazon Fire Phone was a complete and utter failure for the company. Data from two months ago indicated that as few as 35,000 Fire Phones were in circulation, causing Amazon to slash their on-contract price in an attempt to shift more stock.

Now that the company's third quarter earnings report is in, we're getting a better look at how the phone has performed. For Q3 2014 Amazon posted revenues of $20.84 billion, up 20% from the same period last year; however operating losses were significantly higher at $544 million.

Amazon wrote off $170 million as a direct result of the failed Fire Phone, stating the company has a further $83 million of inventory still to deal with. Executives said they were learning from their successes and failures, and might not be so quick to jump into a market next time around.

Amazon's financial results were also affected by the $1 billion acquisition of Twitch, and a $2 billion investment in the Indian ecommerce market. Despite a large increase in free cash flow compared to Q3 2013, Amazon stock tanked by 10% in after hours trading following the news of a significant operating loss.

Next quarter Amazon expects the losses to continue, estimating to lose around $570 million for the period. It may be some time before the online retail giant can return to profitability.

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https://www.techspot.com/news/58563-amazon-q3-2014-fire-phone-fail.html

 

[Kibaruk]

Don't think the market was fond to a forked android version. If they'd made something similar to the Moto G this would be another story.

 

[oldikes]

Didnt make the phone competitive enough hardware-wise and they too heavily integrated amazon into the phone itself. just my opinion though,

 

[cmbjive]

There is no point to Fire TV, the Fire phone, and the Kindle Fire. Until Amazon differentiates itself it will continue to lose money on products that are too me-tooish relative to other offerings.

 

[Arris]

I wonder if they are repackaging their huge stock pile of fire phones into the Fire TV boxes?

 

[mctommy]

I wonder who the geniuses were behind development (or co-development) of that phone... they should be blacklisted from any wireless device design/development team.

 

[Guest]

The Fire Phone would have been a nice phone two or three years ago. I'm betting all the proprietary software took too long to develop.

 

[SirDigby]

ARE THEY SURPRISED?!
There'd be a much larger adoption of the Kindle Fire tablets and phones if they don't use their horrid custom android FireOS, it's terrible and you know that it's just completely designed to make you buy more.
Stop it Amazon, let people make their own choices to buy things.
Also, STOP BEING SO OUT OF TOUCH.

 

[Jim$ter]

1. Don't limit yourself to one carrier.
2. Make it amazing and cheap if you want to make inroads

Both 1&2 combined killed it right off the bat. You not the iPhone or Galaxy yet so don't try to be.

 

[Guest]

It seems the entire premise of Amazon is to gain market share and operate at a loss until it has sufficient advantage to raise prices and make a profit I.e. last man standing.

Crushing small scale book publishers does seem viable, but the the big tech players could easily fend this strategy off forever, leaving Amazon as a company that never makes profits. For example Apple/Microsoft/Google throw a few billion into creating a seperate retailing/shipping company with UPS/Fedex. Only has to match Amazon on everything, doesn't matter if it makes a profit. Result = Amazon with no prospect of ever being the last man standing.

The emperor has no clothes.

 

[Skidmarksdeluxe]

What did they expect? It was doomed to failure from the very start.They limited themselves in just about every way possible and committed the ultimate cardinal sin and insult by pricing it way too high. Perhaps the Nexus 6 will follow a similar path, maybe not as perilous.

 

[TorturedChaos]

There was an Amazon phone?

 

[Guest]

You're saying it had nothing to do with it only being on AT&T? It was a major reason I would not touch the thing. AT&T has the worse service and is only good on west coast. They are not Apple and should not have released as if they were Apple. The phone would have done better if it was not AT&T only.