When it comes to smartphones, we can only remember a few recent outright flops that were not only rejected by the tech community, but also general consumers. There was the ill-conceived Microsoft Kin, the HTC First “Facebook Phone” and more recently, the Amazon Fire Phone. In late 2014, Amazon took a $170 million charge on unsold Fire Phone inventory and ended up canning dozens of employees from its Lab126 “skunkworks” division that developed the smartphone.
Credit: Flickr - Steve Jurvetson
But if you thought that the Fire Phone was an epic fail from Amazon, you haven’t seen anything yet. In an interview with The Washington Post, Amazon CEO Jeff Bezos takes pride in his company’s failures (no matter how expensive and spectacular) and chalks it up as a learning experience.
"If you think that's a big failure, we're working on much bigger failures right now,” said Bezos. “And I am not kidding. And some of them are going to make the Fire Phone look like a tiny little blip.”
But Bezos didn’t stop there. He continued, adding, “And so every single important thing that we have done has taken a lot of risk taking, perseverance, guts, and some of them have worked out, most of them have not. That has to happen at every scale level, all the way down, and you have to take shots...you always learn something and you move on.”
Some of Amazon’s big risks have paid off like its popular Kindle e-readers, Fire tablets, Amazon Prime (and its vast ecosystem, which has grown to include streaming videos and Same Day Delivery), Amazon Web Services, and most recently Amazon Echo and Alexa.
The Amazon Fire Phone started off with pricing as high as $650 off contract when it launched as an AT&T exclusive in 2014. But slow sales forced Amazon to quickly slash the smartphone’s price. By the time the final inventory of the Fire Phone was making its way out the door, it was selling for around $130 off-contract. And you have to remember that all Fire Phones came with a free one-year subscription to Amazon Prime, which itself retails for $99. So customers were in effect getting a brand new smartphone (albeit one unloved by most) for $30.