Amazon Fire Phone: Made for Boss, Rejected by Mass.

Amazing products often come out from Lab126- Amazon R&D Centre. Most of them already have deep rooted impact on day to day life of a normal person. Jeff Bezos , visionary leader behind Amazon, believes in doing all the background work to near perfection before launching any product for public. Till now Amazon has been following a simple rule for product development: Identify the customer need and work backward. Every time it came out with near perfect solutions for public needs. Amazon web services, Kindle to name a few.

Customers are King of market. They rule it. They often play with the fortune of every company. Not even a single company can force its product on customers. Amazon tried it once by changing its product development strategy. And guess what? Amazon is writing off 170Million$ inventory of fire phone.

Here is our analysis why it happened? How it happened? And why every Start up should pay attention to Fire Phone failure.

  1. Why Amazon Err.. Jeff Bezos wanted to develop “An Amazon Phone”?

Apple Phones offer apple web services. Android Phones offer Google web service. And Amazon? It has no hardware in its kitty despite having world acclaimed web services.

As the world goes mobile, an Amazon phone would provide a more direct link to its users. Today, customers often come to Amazon via iPhones or Android devices. Not controlling the hardware can create problems. For instance, you can’t buy e-books through the Kindle app on your iPhone because Apple takes 30% of app-driven sales—a cut that would hurt Amazon’s already razor-thin margin.

By sinking money and resources into a smart phone, the company had hoped to gain a significant piece of the huge smart phone market long dominated by rivals like Apple & Google & Samsung. Moreover, the Fire was supposed to funnel mobile shoppers to Amazon’s online store by making it easier to find and buy products.

Need for Fire Phone was basically not customer driven! It was result of Amazon think tank to control their product buying in grand manner. Now you see. They were forcing a product on customer.

Product was destined to doom.

  1. How Jeff Bezos made it a different Phone?

It’s an adequate device with features comparable to others in the market in terms of screen, camera & memory. What sets it apart is a three-dimensional effect for graphics on certain apps and an application called Firefly that lets shoppers in bricks and mortar stores easily identify over 100 million different products and then buy them online (preferably at Amazon).

Rumors are there that this phone was under development for 5 years in Lab126.

Adding three dimensional graphics into Fire Phone became the major concern as it turned into a battery consuming device. Features like firefly & 3D perspective was never a hit with customer. Moreover its kitty of apps was far less than android based & iPhone.

  1. Who were the rivals of Fire Phone in Market?

Mobile Phone market leaders: Apple and Google/ Android based mobiles. It’s a very densely populated space of mobile market which Amazon tried to capture. Apple came into market 7 years before Amazon’s Phone launch and android based phones were 6 years too early than Amazon phone. In such a cut throat competitive market, simply releasing something “adequate” isn’t enough. It required Firephone to have some breakthrough hardware or software.

“If they had shown up with this phone a long time ago, they could have gotten a lot more attention,” says Frank Gillett, a Forrester analyst. “But it’s a very noisy crowd in an established market. Once you show up at the party now, nobody pays attention.”

  1. Was Fire phone’s compatible with Amazon product category & Customer expectation?

Being one of the most admired brands and having presence at the top of customer satisfaction surveys, Amazon is a company that hundreds of millions of people depend on for good deal of boring daily use products – a low cost paper napkin, not on a $200 smart phone.

People often anticipate some cheap & unexciting device from Amazon. A sophisticated piece of engineering will often be subjected to huge risk; will be lot costly and unexpected.

Definitely Fire phone was not carrying the image of Amazon’s Typical Product.

  1. How was the marketing of Fire Phone?

Unlike Androide devices & iPhones, Amazon Fire Phone was made available at selective strategic stores. for online buying & few brick & mortar stores like Best Buy and AT&T. This limited the availability of the phone to customers. Any product at its beginning needs exposure to largest possible customer base. Through such exposures product gets maturity.

Amazon marketing strategy hence misfired.

AND IN THE END …. In late July 2014, the Fire Phone finally went on sale.

Consumers considered its smart phone effort utterly misguided.

Reviewers knocked the device for its gimmicky features, especially Dynamic Perspective, which most found worthless and distracting.

They also took issue with the Fire Phone’s bland industrial design and disappointing ecosystem; Amazon simply doesn’t offer the same library of apps or cohesion of services as Apple.

But what Amazon got most wrong, they said, was the cost: The Fire Phone was too expensive for its customers.

According to sources, the Fire Phone sold just tens of thousands of units in the weeks that preceded the company’s radical price cuts. The $170 million write-down confirmed that the launch has been a dud.

This is how mighty Amazon were shown doors by customers and all because Amazon’s Chief tried to force an outdated, overpriced, poorly marketed, utterly disgusting phone on King of Market.

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