Amazon.com Inc (NASDAQ:AMZN) stumbles in the smartphone market
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Amazon.com Inc (NASDAQ:AMZN)’s venture into the smartphone market didn’t go quite well as it was planned. The Fire phone, which was highly publicized and anticipated, got duped by the customers within months. Amazon.com Inc (NASDAQ:AMZN) was forced to introduce a price cut of 200 dollars after a couple of months, seeing that the market wasn’t even paying attention to the phone, let alone buying it.
Out of the 437 million dollar loss Amazon.com Inc (NASDAQ:AMZN) posted, 40 percent of it is owed to the Fire phone. So why did Amazon.com Inc (NASDAQ:AMZN)’s smartphone fail so miserably? Was it actually that bad? The primary reason of the phone’s failure was the staggering selling price. It was priced at 650 dollars without a subsidy. When the initial outcome was horrible, Amazon.com Inc (NASDAQ:AMZN) introduced a subsidized contract price of 200 dollars as well.
The executives at Amazon.com Inc (NASDAQ:AMZN) accepted their mistake of pricing the phone too high, which was contrary to Amazon.com Inc (NASDAQ:AMZN)’s usual pricing strategy. Amazon.com Inc (NASDAQ:AMZN) was aiming straight at the formidable players of the smartphone market like iPhone, the Galaxy series etc. But Amazon.com Inc (NASDAQ:AMZN) should have known better!
The company overestimated itself too much. Although the phone has brought Amazon.com Inc (NASDAQ:AMZN) a string of huge losses, the company is still adamant to stick to the project and vows to continue making smartphones. Another factor that came into play, which played a large role in undermining the status of the Fire phone, was the Greenpeace campaign against Amazon.com Inc (NASDAQ:AMZN).
Greenpeace asked its supporters to rate the phone poorly on Amazon.com Inc (NASDAQ:AMZN)’s website. The reason is because Amazon.com Inc (NASDAQ:AMZN) is still fueled by non renewable energy coming from coal, gas, oil etc. Greenpeace argued that the phone usage would indirectly endorse dirty energy, posing a threat to the environment and climate. Apart from the Greenpeace campaign, many users aren’t happy with the Fire phone as well.
Many are even accusing Amazon.com Inc (NASDAQ:AMZN) of swindling. One major reason for that which we can’t ignore is that Amazon.com Inc (NASDAQ:AMZN) shouldn’t have brushed off the fact that the smartphone market is ruled by some veteran companies. Those companies, like Apple Inc (NASDAQ:AAPL), Samsung etc have been around for quite some time, in fact enough time to make a formidable and respectable reputation for themselves.
Amazon.com Inc (NASDAQ:AMZN) should have taken that into account; it possibly couldn’t have thought of competing against the Android, Windows and IOS. Amazon.com Inc (NASDAQ:AMZN) is known to have a stubborn nature and is still sticking to the smartphone category. But that might not be a bad move after all as all Amazon.com Inc (NASDAQ:AMZN) will have to do is stay more vigilant and observe the smartphone market.
Rather than launching another expensive phone into a world of indefinite obscurity, Amazon Inc (NASDAQ:AMZN) should take care of the current mess first. It shouldnt just close its eyes and stay stubborn because at the end it will have a pile of losses to rue. Amazon should show some market sense instead of behaving like a headstrong child.