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Amazon has $83 million in unsold Fire Phones

Fri 24 Oct 2014 8:15am GMT / 4:15am EDT / 1:15am PDT
Hardware

Retailer takes a $170 million charge on its smartphone in the third quarter

Amazon

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The struggles of Amazon's Fire smartphone were laid bare in its third quarter results, as the online retailer revealed it had $83 million of unsold stock.

In a quarter that saw the free-spending company make a $437 million loss, Amazon recorded a $170 million charge, "primarily related to Fire phone inventory valuation and supplier commitment costs."

In a call with investors, CFO Thomas Szkutak noted that the bulk of the charge was related to its North American, with only $25 million attributable to foreign territories. He also revealed that company was sitting on $83 million worth of unsold Fire phones.

Amazon introduced the Fire phone in July this year. Along with the Kindle Fire and Fire TV, Amazon's phone was one piece of a new hardware strategy with the potential to become a lucrative platform for game developers.

Indeed, the company started assembling a team of experienced developers to create content for Fire devices, including Clint Hocking, Kim Swift and Double Helix, among others.

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8 Comments

Adam Campbell Product Executive, Hopster

1,436 1,495 1.0

From the outset I didn't expect huge uptake on this device at such a high price. It seems to miss one of the main reasons people so easily adopted their tablet. Cheap devices with great specs and features are highly sought after, and continue to eat into the market of more expensive products.

Posted:A year ago

Jeff Kleist Writer, Marketing, Licensing

743 495 0.7

@Afdam

I think it can be summed up: "No one wants to read books on their phone :)

I used to do it, it sucked :)

Posted:A year ago

Kieren Bloomfield Software Engineer, EA Sports

104 102 1.0

I think one of the biggest problems the phone has got is its availability. In Canada it doesn't appear to be available, a quick search on amazon.ca for 'fire phone' brings up tablets, books about the phone and accessories but no phone. In the states it pops up but it's tied to AT&T. It appears they decided against going Google's successful route of selling the Nexus without a contract and not locked to a particular network.

Posted:A year ago

Andrew Jakobs Lead Programmer

293 159 0.5

Did they have a phone? maybe it just wasn't a good idea to release 3 different Fire products at the same time..

Just checked, looks like a nice phone, up until I saw the price and the screen resolution... Oh, and now I remember, they teased it back then that they would have something very special with '3D'....

Posted:A year ago

Jeff Kleist Writer, Marketing, Licensing

743 495 0.7

@Andrew

It uses multiple cameras to "tilt" the interface toward you no matter what your angle to the phone. There other applications for that, like video conferencing and stuff, but it's not a feature that sells phones

Posted:A year ago

Ron Dippold Software/Firmware Engineer

67 221 3.3

One rumor on this is that AT&T forced Amazon to scuttle a low-price phone - for which there might have been more demand. Because if it's not dirt cheap there's just no reason to buy this over something like the Moto G. And I say that as someone with a very active Amazon Prime account.

http://www.businessinsider.com/att-broke-up-amazon-htc-deal-2014-9#ixzz3D1CZ6GL8

Posted:A year ago