Amazon.com, Inc. (AMZN)’s Fire Failure: What Can Other Smartphone Makers Learn?

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Amazon.com, Inc. (NASDAQ:AMZN) is one of those companies, that sets its eye on a goal and then goes on to achieve it. So, it’s really surprising that it failed so miserably in making its smartphone, Fire, a hit. While most people in Media and on the Street were busy talking and glorifying the new devices that Apple Inc. (NASDAQ:AAPL) launched recently, a post on Business Insider shed light on Amazon.com, Inc. (NASDAQ:AMZN)’s Fire phone debacle and what other companies can learn from it.

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Amazon.com, Inc. (NASDAQ:AMZN) slashed the price of its Fire phone to a whopping $0.99 (with a two year contract) recently, which many people on the Street believe is a move to compete with the new iPhones. While price of the 32GB Fire phone was slashed, the price of the 64GB model hasn’t been reduced from $100. According to the article, the reason behind that might be that Amazon.com, Inc. (NASDAQ:AMZN) is searching for its own loyal customers who, apart from being in love with downloading movies and games,  can also make the Fire phone a success.

The article points out that at the time of launch, Amazon.com, Inc. (NASDAQ:AMZN) had kept the price of the Firephone similar to that of the iPhone or Samsung Galaxy smartphone and even the specification of the Fire phone were not bad comparatively. The real reason behind the failure of Fire phone, according to the article, lies in Amazon.com, Inc. (NASDAQ:AMZN)’s adamancy to keep the phone within its ecosystem. The article also highlights that the real Goliath in the smartphone world is Android, which is the mobile OS used by 85% smartphones in the World and compared to other mobile operating systems is relatively much more open and lean. Hence, if smartphone makers want to succeed, they must work towards shattering the wall of their own ecosystems.

As of June 30, 2014, Ken Fisher‘s Fisher Asset Management owns over 2.4 million shares in Amazon.com, Inc. (NASDAQ:AMZN).

Disclosure: None

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