In Amazon's latest earnings report, the company wrote off $170 million as a direct result of their Fire Phone. With an additional $83 million in stock lying around waiting to be sold, the first smartphone from the company can be seen as nothing other than a colossal failure.
Despite the failings of the Fire Phone, Amazon SVP of Devices, David Limp, has indicated that the company will produce a sequel to it. Like with the Kindle, whose first iteration was received poorly by critics, Amazon is taking a long-term approach to producing the perfect smartphone for consumers.
The company blames the Fire Phone's price for its commercial failure, believing it was simply too steep for most customers to consider. Limp said that "people come to expect a great value, and we sort of mismatched expectations", causing Amazon to drop the phone's on-contract price from $200 to $0.99 just three months after its launch.
Although the price cut helped Amazon sell more Fire Phones, it hurt the company's bottom line. However, Amazon will continue to release software updates for the Fire Phone, despite it being "too late" to try and salvage the first-generation product from a sales perspective.
"We are going to keep iterating software features to get it better and better", Limp stated; "each release that we’re doing, we’re learning." Hopefully Amazon will take this knowledge and use it to craft a far superior second generation Fire Phone.