Poor Fire Phone sales take their toll on Amazon

Poor sales of the Fire Phone are taking their toll on Amazon's business.

 

In a conference call the company said it would take a $170m write down “primarily related to Fire phone inventory valuation and supplier commitment costs.”

 

Amazon’s phone was said to be the “iPhone killer” ahead of its release, but even its own customers seem to view it as a particularly ineffective executioner: the Fire Phone currently has a two-star rating on Amazon, the iPhone 6 Plus gets four stars.

 

Even after the website slashed the price of the phone in the US from $199 to 99 cents with a two-year AT&T contract, sales have remained poor.

 

 

The Fire Phone is available in the UK for an upfront cost of £0, with various monthly tariffs exclusive to O2.

 

The phone does include new technology features such as "Dynamic Perspective", which responds to users' movement and view, and Firefly technology, which allows users to quickly identify music, movies and TV and – conveniently – purchase them off Amazon. However, the phone which uses Android technology, has been accused of not being disruptive enough to usurp Apple's iPhone.

 

Shares in Amazon plunged to their lowest point in over a decade yesterday, after the company reported disappointing third-year financial results, well below analysts’ expectations.

 

The online retail giant posted the biggest operating loss of $544m – the biggest in its history. Total revenue stood at $20.58bn, below an expected $20.84bn.

 

Furthermore, the company said it expected sales of between $27.3bn and $30.3bn, below Wall Street's predicted $30.4bn.