There’s no question that the Fire Phone has been a spectacular flop for online retail giant Amazon. While the company has found success with its Kindle e-Readers and Kindle Fire tablets, Amazon found that breaking into the cutthroat smartphone market takes more than a strong brand name and some decent hardware specs.
When the Fire Phone launched last year, it cost $199 (32GB) with a new two-year contract from AT&T (the exclusive carrier for the Fire Phone; another big mistake). Pricing off-contract climbed to as much as $650 off-contract for the 64GB Fire Phone, which was a lot to ask in the face of competition from the Samsung Galaxy S5 and Apple iPhone 5 -- its contemporaries at the time of launch.
Needless to say, Amazon has had fire sales on its Fire Phone over the past few months to clear out inventory. As recently as yesterday, Amazon sold the 32GB Fire Phone for $130 off-contract, unlocked complete with a free year of Amazon Prime. Considering that Amazon Prime itself costs $100 a year, it’s no wonder that the the phone is now out of stock, with Amazon indicating, “We don't know when or if this item will be back in stock.”
Now, a new report from The Wall Street Journal states that dozens of engineers that were responsible for the Fire Phone — which was developed in Amazon’s Lab126 hardware “skunkworks” division — have been sacked. Amazingly enough, this is the first round of layoffs ever for Lab26, which has been in existence for over a decade. Another consequence is that Amazon won't waste resources trying to develop a new smartphone.
Lab26 has not only given us the Fire Phone, but it was also responsible for the Echo speaker, Fire TV/Fire TV Stick streaming devices and the ‘Dash’ Wi-Fi buttons. However, with these new job cuts, that means that future products that were on the table, including a stylus that translates handwriting and a massive 14-inch tablet, have been put on the back burner.
But all is not lost. The Wall Street Journal reports that it’s still “full steam ahead” for a project codenamed Kabinet. Kabinet is reportedly a “high-end computer” that all accept voice commands like Echo and of course entice users to buy more merchandise from Amazon.com.