Amazonian pain forest – Bezos drove company into Fire storm

7 Jan 2015

Jeff Bezos, CEO of Amazon

Amazon CEO Jeff Bezos was the primary force behind the Fire Phone, so he can take the blame …

Amazon’s smartphone disaster is a deeply embarrassing chapter in the ultra-successful company’s history, with news emerging that the product’s errors came straight from the top.

Amazon’s dominance in many other areas of tech comes on the back of risk taking and diving into new and exciting areas of the industry – see Kindle and Amazon Web Services for undoubted successes, grocery delivery in certain US states as examples of biting off more than it can chew.

Elsewhere plans of it opening its own hotel booking service sounds as convincing as it does unconvincing, exactly the type of scenario Amazon could make money from.

So Bezos, a charismatic CEO, decided a few years ago that Amazon would enter the smartphone sphere. The reasons behind this – primarily to do with tight margins – are perhaps best explained by a recent dispute between the company and Google.

Back in September Amazon’s app in the Google Play Store suddenly included an app store of its own. The app had tens of millions of users and Google didn’t like how these customers could bypass the Play Store, costing potential sales. Google changed developer rules, and Amazon had to change.

The battle for profits in Amazon’s margin-thin empire, it’s clear, is never ending. If Amazon could develop its own smartphone it would link it directly to its customers, improving margins across countless revenue streams.

Grand ideas and failed execution

Well, in Fast Company’s rather excellent and lengthy feature on Amazon, interesting elements of the Fire Phone’s creation emerge – and Bezos, for all his talents, comes off rather detached from what was surely the ultimate goal, creating a sound, affordable consumer-focused smartphone.

Bezos, insiders say, was “the product manager” on the Fire Phone. “Even the very smallest decisions needed to go through him,” says one source. “In essence, we were not building the phone for the customer – we were building it for Jeff,” says another.

Among Bezos’ elaborate hopes for a phone that could compete with Apple’s iPhone was a strange 3D display that didn’t need glasses and could react to whatever angle from which you were looking at the phone. It was called ‘Dynamic Perspective’ and it does sound quite cool, if not a bit gimmicky.

Through years of research, testing and brainstorming, it appears two phones emerged on the production line. A cheap model and a premium one – only one of which screams Amazon.

We all love 3D …

“In meetings, all Jeff talked about was, ‘3-D, 3-D, 3-D!’ He had this childlike excitement about the feature and no one could understand why,” says an engineer who worked on the project.

“We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one.”

It remains to be seen what Amazon’s plans are for the Fire Phone, which they can’t seem to shift at any price. However, judging by the company’s other projects over the last decade, it’s clear that further investment will be ploughed into the project and, who knows, in a few years’ time we may talk of it as a genuine competitor in Apple’s high-end market.

Indeed the Fire Phone debacle has prompted Bezos to instigate changes at its hardware R&D group Lab126 to make it more nimble, focused and capable of creating hardware consumers will buy.

Gordon Hunt was a journalist with Silicon Republic