Amazon has acknowledged that it ‘didn’t get the price right’ as far as its Fire Phone is concerned and with respect to the $199 on-contract price tag, the company said that it wasn’t able to match customer expectation of great value.
Speaking with Fortune, David Limp, Amazon’s senior vice president of devices, said “We didn’t get the price right,” and “I think people come to expect a great value, and we sort of mismatched expectations.”
Amazon slashed Fire Phone pricing to $1 on-contract in the second week of September and just last week it announced taking a $170 million hit as a result of the price cuts. Limp added that the company is still in possession of $80 million worth of Fire Phone inventory.
Pricing isn’t one of the thorns for Amazon to tackle. Users have been complaining of range of issues such as overheating, poor battery life and lack of apps.
Limp said that they have been able to address a lot of issues through updates, but that doesn’t seem to have gone well for Amazon as far as sales is concerned. “We are going to keep iterating software features to get it better and better,” said Limp.
“Each release that we’re doing, we’re learning. Beyond that, I leave it out there to see what people think”, he added.
One thing worth noting, as far as Fire Phone is concerned, is that Amazon entered the mobile phone arena when it was already crowded and its ability to grab a share was challenged right from day one. This is in stark contrast to the eReader and tablet market it has established through Kindle range.
Limp’s optimism about continued support for Fire Phone through regular updates and features may sound pleasing to existing customers, but won’t give a lot of reasons for others to jump ship and it would be a rather wait and watch game for Android and iOS users.