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Amazon exec says 'we didn’t get the price right' on the Fire Phone

Amazon exec says 'we didn’t get the price right' on the Fire Phone


Company says it misjudged people's expectations of a $200 phone

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Hindsight is 20-20, something Amazon now has about the launch of its first smartphone. Amazon debuted the $199 Fire Phone in June, though trimmed the price of the device to 99 cents (with a two-year contract) just two months after it went on sale, without explanation. Speaking to Fortune, Amazon's senior vice president of devices David Limp now says the company simply whiffed on the pricing. "We didn't get the price right," Limp said. "I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we're also willing to say, ‘we missed.' And so we corrected."

"We thought we had it right."

That correction — as Amazon calls it — also hit its bottom line, as the company revealed last week. While reporting an operating loss of $544 million for its latest quarter, the company noted that it was taking a charge of $170 million related to the Fire Phone. It also said it was still sitting on $83 million worth of phones going into its fourth quarter.

Much like its Fire tablets, the Fire Phone was designed to help users mainline all of the company's services, from buying things on, to accessing its streaming music and video services, and custom Appstore. It also launched with an exclusive feature called Firefly that would identify objects that could be purchased from Amazon. However, the key feature designed to set it apart from other smartphones was a set of front-facing cameras used to create a sense of faux 3D motion.

Amazon still hasn't released sales numbers on the device, and isn't likely to. The company typically keeps them secret, preferring instead to compare sales to the previous iterations. Customer reviews of the device have been less than kind, averaging less than two and a half stars across 3,399 reviews.