Amazon.com, Inc. (AMZN)’s Plans for Fire Phone Might be Long Term, Based on Current Sales Estimates

0

Amazon.com, Inc. (NASDAQ:AMZN) launched their new Fire Phone in July. There was a lot of hype around the technology associated with this phone, including the 3D maps and multiple cameras. CEO of Amazon, Jeff Bezos unveiled the phone in July and displayed the various capabilities of the phone. But how did this phone fare in the market? Amazon did not come up with any sales numbers for this phone. An article in ‘The Guardian’ describes the method used to estimate the approximate sales numbers for the Amazon’s Fire Phone.

Amazon, Twitch Interactive, is AMZN a good stock to buy, Ethan Kurzweil

Amazon.com, Inc. (NASDAQ:AMZN) priced this phone at $200 with an AT&T contract, which is equal to an iPhone 5S or Samsung Galaxy S5 pricetag. Amazon positioned their Kindle tablets in the mid-priced category, but the phone is actually in the high-end segment. Not many companies, including Amazon, give the device’s sales numbers in their financial report, one exception being Apple Inc. (NASDAQ:AAPL). So analysts come up with their very own estimation method to estimate the device sales numbers for various products.

Data from Chitika’s ad network pointed out that the activity through Fire phone, 20 days after the launch was around 0.015% of the total activity. Utilizing the ComScore monthly data on US smart phone users might convert the 0.015% usage onto the number of devices. ComScore data showed around 175 – 177 million smartphone users in US from the launch of Fire phone till mid of August. Combining 0.015% with 175-177 million turns out to be 26,400 devices.

This kind of estimation through Chitika data cited by The Guardian has proved to be under-indexed of over-indexed in few instances. In order to avoid any such under-indexing concerns, 25% was multiplied with the estimated number, from the past experience. With the factored 25% correction the number of devices amounted to around 33,000.

Adding some margins for errors, it is highly improbable that there would be more than 35,000 Fire phones used 20 days after its launch. Is 35,000 a good enough number in first 20 days? Many analysts would say no, if the company targets a short term goal. But if the company’s target is to achieve a long term growth, then 35,000 might be a decent figure.

“While Amazon certainly is looking to make the Fire, Phone a hit, current conditions show this being more realistic as a long-term goal rather than a short term one,” Chitika was quoted by The Guardian.

Ken Fisher‘s Fisher Asset Management is one of the biggest shareholders of Amazon.com, Inc. (NASDAQ:AMZN), holding around 2.5 million shares of the company.

Disclosure: None

Suggested Articles:

Most Expensive Headphones

Most Expensive Jewelry Brands

Share.