Amazon executive on Fire smartphone: ‘We didn’t get the price right’

31 Oct 2014

Amazon’s senior vice-president of devices David Limp has admitted the company failed to correctly price its first ever smartphone.

The Fire Phone has not proved to be a success for the international e-commerce giant. As revealed by Fortune, a surplus of US$83m worth of unsold devices are currently being stored, while users have been concerned by the phone running hot and disappointed with the small selection of apps.

Moving away from its usual tactic of undercutting the competition on hardware, Amazon’s pricing was in line with US norms, at US$199 for the 32 gig model and US$299 for the 64 gig. 

“We didn’t get the price right,” Limp told Fortune. “I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we’re also willing to say, ‘we missed’. And so we corrected.”

“When you’re taking risks, they’re not all going to pay off,” he added. “Those are the facts.”

Last month, the Fire Phone’s price went from US$199 to just US$0.99.

Amazon recently unveiled its latest piece of hardware, a new Chromecast-eque dongle it’s calling “the most powerful streaming media stick available”.

The Fire TV Stick features a dual-core processor, 1GB of RAM, 8GB of storage, and dual-band and dual-antenna Wi-Fi. It plugs into the HDMI port on a HDTV and can stream content from a variety of services, including Netflix, Hulu Plus, Spotify, Pandora and Amazon’s own Prime Instant Video.

Amazon image via Shutterstock

Dean Van Nguyen was a contributor to Silicon Republic