Amazon’s investment went wrong: Fire Phone A Big Flop Amount For $174M Loss

27 Oct 2014 | Author: | No comments yet »

Amazon Fire TV gets bigger and better with over 600 apps and games.

Fire Phone was unveiled by the company during an event at Fremont Studios in Seattle, Wash. on June 18, 2014. and went on sale with AT&T (T) in the summer of 2014 In its third quarter Inc posted a $437 million net loss i.e. a loss of 95 cents a share, more than the estimation of 74 cents per share on Thursday. They stepped into the media-streaming box industry with the Amazon Fire TV, the games industry with the purchase of Double Helix Games, and also the smartphone market with the Amazon Fire Phone. While we’re still waiting to see how successful the company’s foray into the media and games industry are, we can mark its entry into the smartphone business an utter failure. Amazon CFO Tom Szkutak revealed to investors that the company has lost $170 million dollars, and currently has $83 million Fire Phones in inventory that have failed to sell.

After three months of the big letdown in July, the warning may come as an inclination for the investors who are by now cagey of a triple-digit price-earnings ratio and a obstinate reluctance to curb back spending. With the recent releases of Apple’s iPhone 6 and iPhone 6 Plus, and Samsung’s Galaxy Note 4 – three phones from the two biggest smartphone players – it doesn’t look like it’ll get better for Amazon’s Fire Phone anytime soon. While AT&T is the second largest wireless network in the country, it’s dangerous to sign exclusivity deals when more popular phones are launching on all four major providers.

We also hear from customers how much they love playing games on their TV—9 of the top 10 grossing apps on Fire TV are games—so we continue to work with game developers and add the most popular game content. Secondly, the phone has been hampered by mixed reviews, and the fact that the Fire Phone doesn’t have a defining feature that make it a must have device. Being exclusive to AT&T and inappropriate pricing might be the chief cause of the device’s failure. “There are a lot of reasons it failed, but they key is that Amazon provided no good reason for consumers to buy it,” explained one of the analysts. “As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever,” said Bezos showing a sign of optimism. “In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition.”

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