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Amazon admits to Fire Phone pricing error

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Amazon Fire Phone
Amazon Fire Phone

An Amazon executive has admitted that the company made a mistake when pricing up its Amazon Fire Phone flop.

The Amazon Fire Phone launched in the US back in July for a standard $199 up front free on a two year contract, which ran contrary to Amazon's former habit of undercutting its rivals on hardware.

In a recent Fortune interview, Amazon Senior Vice President of Devices David Limp has acknowledged that this was a mistake on the company's part.

"We didn’t get the price right," Limp accepted. "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."

Sure enough, the company slashed the up-front price of the Amazon Fire Phone to just 99 cents in September, which coincided with the phone's UK rollout. While Limp claims that this move yielded significantly better sales, everything suggests that Amazon's first smartphone has been a disaster.

Back in August, a month after its initial release, one educated estimate put it that the Fire Phone may have sold just 35,000 units in its first weeks on sale.

More recently, Amazon has reported a £100 million loss on its first smartphone in the company's recent quarterly performance report. It was also revealed that Amazon had £50 million in unsold Fire Phone stock gathering dust in its vast warehouses.

Limp has promised that Amazon will continue to improve the Fire Phone through software, but one suspects that it's pretty much a write-off even at this early point. So, the Amazon Fire Phone 2, then?

Read More: Amazon Fire TV review

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