Amazon takes a $170 million hit thanks to unsold Fire Phones



If you needed any further proof that the Amazon Fire Phone was an absolute flub, the online retailer announced during their Q3 2014 earnings call that they’ll be taking a $170 million charge for unsold Fire Phones (and other costs relating to inventory valuation and supplier commitments). Despite net sales up 20% at $20.58 billion for the quarter, their operating losses — a whopping $544 million — is the largest ever in Amazon’s history. That’s gotta hurt.

After years of rumors, the Amazon Fire Phone finally launched earlier this year exclusively on AT&T for $200 on contact. The Fire Phone also came equipped with gimmicky new features like their Firefly camera software which could identify Amazon products in the real world (as well as do a bunch of other stuff your regular Android device could do right now). After Amazon’s first smartphone was met with relatively lukewarm reviews, it saw a quick $100 price drop.

Still, Amazon is optimistic, especially with the busy holiday shopping season fast approaching. Along with curated product lists and shopping guides, Amazon will push their new lineup of products like the Kindle Voyage and Fire HD Kids Edition tablets.


Chris Chavez
I've been obsessed with consumer technology for about as long as I can remember, be it video games, photography, or mobile devices. If you can plug it in, I have to own it. Preparing for the day when Android finally becomes self-aware and I get to welcome our new robot overlords.

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  1. Anyone getting “FIRED” over this? ;-P

    1. i see what you did there

  2. They should have sold this like their tablets… at cost. It should have been AT MOST a $50 on contract $300 off contract phone

  3. It’s probably best to create a limited supply when you produce your first entry into a crowded market. Also, shouldn’t have shot themselves in the foot by selling through 1 carrier. They’ll learn from this.

    1. the carrier exclusive is up in the air on this one for now. i mean, i dont think this phone would have beat other phones out at those price points so the money at&t paid to have this exclusive probably reduced their loses to this $170 million. it would have likely been more.

      1. I thought about that but then decided they would have sold more phones if they also let T-Mobile have it too. A lot of budget shoppers tend to want free phone with cheap plans. At least that’s the way I see it could have played out.

    2. everything on that phone couldve been an app. then they couldve sold that app for 2.99 and gotten millions of people to download it.

      1. Exactly.
        I wish the phone mfgs would make some of their U/I features available as apps in the Google Play Store,compatible w/all ANDROID phones.
        HTC’s BLINKFEED,SENSE TV & Samsung’s GEAR Manager apps come to mind…………….

  4. They can still dump them for $199 no contract.

    1. Blu has better phones for the same price. I’d say $100 off contract and on all major carriers would’ve help them.

  5. What also hurt them was, in my opinion, the exclusivity with AT&T..Everyone knows iPhone is King on AT&T . this phone was released as rumors where surfacing about the new iPhone. The phone should of been launched on multiple carriers to offer multiple price points and incentives. If this phone would of been released on T-Mobile for example. Magenta would of offered it at maybe $10 per month x 24 for $240…at least the Fire Phone would of had a better Chance….

    1. The idea if this phone is so bad even having it on all carriers would have catastrophic. Only a super cheap cost of $50 to $150 “off” contract will save this phone. It was a complete disaster from the very beginning.
      This is one of those phones that I wouldn’t even use if given to me free. I haven’t seen anyone confess to owning one outside of reviewers.

  6. They can still sell some of the devices if they were offered free on contract or $199 to $249 off contract.

    1. They’ve been $1 on contract for quite some time.

      1. not worth it.

      2. It really needs to be cheap OFF contract. Then someone might bight if they broke their superior phone and wanted something just to limp along with until their contract is up.

        Hell, no gmail maps or youtube.

  7. What they should have done is sell them by invitation only. Then pulled a bunch of ridiculous stunts to get an invite. Then have hardware, software and customer service problems. That’s never been tried before and might have worked.

  8. Couldn’t they open this phone up to the Google Play Store and unlock it as far as carriers go? Maybe sell them off for $300 off contract? Who in their right mind would buy a phone tied down to the Amazon app store?

  9. When it comes to phones I don’t think Amazon will ever do well or even get close to Microsoft’s Windows Phone level.

    1. I hear Google’s doing pretty well too

    2. Lol windoze phone that has 2% market share pos kin

  10. Oh who would have thought? [everyone]

  11. The idea was doomed from inception and the blame can only fall on Bezos.

    I mean, your the FOURTH entry in a smartphone race that barely needs a THIRD entry. What was he possibly thinking?

  12. People don’t like being confine to a ecosystem, or crap products. JMO.

  13. let this bare witness to any other morons who think about carrier exclusives. for god sakes this hasnt worked since the iphone

    1. It hurt the I phone and gave android a chance.

  14. Good for them. They make a shitty phone then put in exclusive to AT$T when there are better phones out there for less.

  15. So glad people didn’t fall for this pile of crap.

  16. They might want to drop the obnoxious kid commercials while they’re at it.

  17. It wasn’t that bad a phone, but that may be because I’m getting fed Amazon all the time as I shop online with their sites. Was it a high price point yes, but I actually considered it until I heard AT&T. It had okay specs but yup many gimmicks, which I take as battery killers.

  18. Exclusive carrier + mid range specs at high end price + horrible marketing that look like it’s targeted at kids = NO

    1. You forgot to mention proprietary skin with Amazon app store lol

  19. Looks like its time to repackage “Firefly” as a separate Amazon Appstore download. No? Well I’m waiting amazon ;3

  20. Good on them for trying something new! Wait, no. It worked with Kindle and with Amazon.com because nobody was really doing those jobs very well. But smartphones are a long-established field. What were they thinking stumbling into an already saturated market with entrenched leaders? This was pretty much doomed from the start.

    Kindle Voyager, however, looks pretty awesome IMO. Especially for those who don’t own a tablet but read a lot.

    1. Not even close bro, the phone din’t fail because of a saturated market, it failed because Amazon fails to embrace Android and basicly handicaps all their devices. The only reason the fire tablets sell as well as they do is because of the price, and most people just root them to get vanilla Android. This phone costs too much, its not really considered top of the line in terms of specs, aesthetics, or features. You can easily come into the smartphone market and become sucessfull, all you would have to do is listen to the consumers. One plus had great hopes but they completely failed when it came to distribution.

      1. “most people just root them to get vanilla Android”. Please cite your sources. Let’s see the numbers on this statistic you just invented.

        You’re approaching this product from the perspective of a tech geek, not the average consumer who doesn’t care about rooting. Yes, having an overpriced, underpowered, app-limited device were huge factors – you are correct. If you read back my comment, you will find nowhere did I mention that those were not factors, or that market saturation was the only variable. I said it was a mistake for them even to consider making a phone in the first place. Oversaturation boils down to too little, too late. They were 7 years late to market, with very little differentiation of their product, and other brands were already dominating. Windows Phones and Facebook Phones had the same problem.

        As stated in Forbes, “Modest success but zero threat against iPhones or Samsung Android devices”

        (source: http://www.forbes.com/sites/jeanbaptiste/2014/06/19/4-reasons-the-amazon-fire-phone-will-fail/ )

        OnePlus has never been a threat, they’re not even on the radar. I’d be amazed if they’ve sold even a million phones globally. That’s also a good example, though. Even if they make a great phone, the market is too saturated for them to make a dent and capture even than 2% of the market share. There are some elements that are finite resources – quality displays, SoCs, what have you. Relationships with suppliers, retails, distribution channels, etc are locked up with deals with the big players – namely Apple & Samsung, and to a lesser extend, LG, HTC, and Nokia. Those companies get first dibs on everything, and the tiny scraps are left for everyone else. It’s not surprising OnePlus failed on distribution.

    2. Plus, the AT&T exclusivity for a first-time phone doesn’t help them either.

  21. I really dont get who green-lighted the phone. I can understand the idea that they wanted to lock people into their ecosystem but it was far, far to immature to work on a phone. It couldn’t do the basic things we expect from a smartphone and the things it could do were limited, Amazon centric things.

    For the tablet, which is all consumption, its OK but for the phone they would have had to unfork the OS, get on with Google Services and then just have their own appstore installed by default.

  22. Bet no one could have predicted that no one would buy an amazon phone filled with spyware to get you to buy more stuff off of amazon, without the gooogle play store. /s

  23. Well after my kid’s company that he started in our garage took off, I bought him the fire phone. He loves it, especially when planning out his real estate deals. :rollseyes

  24. You mean contract

  25. [nelson]Ha-ha![/nelson]

  26. I’d say they should open up the phone and donate the remaining stock to 3rd world countries. They can even order food! Off Amazon of course!

  27. The only way they can sell these phones is to mom-and-pop shops looking to sell on Amazon, and to fool people into thinking it’s a great phone.

  28. Want me to buy this phone?? Give me 5 years of amazon prime free with purchase. Seriously, it wouldn’t really cost amazon anything giving away free prime, and they would have had an explosion of sales for their phone.
    Oh well.
    As predicted it tanked due to being way to overpriced and not an open android OS.

    1. 1 month was an absolute joke. I probably still wouldn’t buy it with 5 years of free prime…but quite a few people would.

  29. Proof Amazon’s phone without Google isn’t ready for “Prime” time

  30. A drop in their big bucket.

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