Is Amazon.com, Inc. (AMZN)’s Fire Phone Priced Wrongly?

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Amazon.com Inc. (NASDAQ:AMZN), a giant online marketplace operator, moved more into hardware with the launch of Fire Phone Smartphone, which appears to be more of a shopping tool than a phone. CNN Money’s James O’Toole took a look at the device, and he thinks that Amazon may have missed a point or two in the introduction of Fire Phone.

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O’Toole admits that the device is cool enough to compete in the red-hot Smartphone market. Nonetheless, he thinks that the pricing of the device denies it the ability to effectively compete against Samsung Galaxy S5 or even Apple Inc (NASDAQ:AAPL)’s iPhone 5S.

“The Amazon Fire phone tries really hard to be cool, but maybe, better off being cheap. There are gimmicks galore, but to be successful Amazon’s first Smartphone needed to do enough to convince people to give up their iPhone and Android device. It doesn’t quite do that,” said O’Toole.

He noted that Amazon.com, Inc. (NASDAQ:AMZN) did right to make its Kindle Fire tablet cheaper than the completion, but the company missed an opportunity by failing to make Fire Phone more affordable. According to O’Toole, making the device more affordable might have the impact of convincing more people to make the switch from say iPhone or Samsung Galaxy devices.

“The Fire Phone costs the same as an iPhone 5S or a Galaxy S5: $650, or $200 with a two-year contract. So at $200 it looks bit expensive and doesn’t convince people to leave their iPhone or Samsung Galaxy device,” O’Toole added.

On the features of Fire Phone, O’Toole observed that the device is pretty cool, but the drawback currently is that most of its features are not practical unless developers come up with new ways to put them to use.

“The headline feature is what Amazon is calling ‘Dynamic Perspective.’ It uses five front-facing cameras to track a user’s head movements and renders a three-dimensional image that changes depending on how you look at it,” said O’Toole concerning the object view feature bundled with the Fire Phone.

As much as Amazon.com, Inc. (NASDAQ:AMZN)’s Fire Phone is a Smartphone, O’Toole said it is as much a shopping tool, which is expected to enhance user experience while shopping on Amazon.

“This device really all comes back to marketing. It is as much a shopping device as it is a phone. The main way Amazon accomplishes that is through a feature called Firefly,” he said.

The bottom line, though, is that Fire Phone is not worth the price and it doesn’t even give people enough reasons to drop their iPhones, for instance.


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