Amazon exec: We priced the Fire phone wrong
When it introduced the Fire smartphone in July, Amazon bet sales would be something worth bragging about. But three months in, it's obvious the Fire phone is more dud than runaway success. — Last week, Amazon CTO Tom Szkutak disclosed …
Context & Ripple Effects
The Fire Phone launched in July as a premium AT&T device pitched as an experiment to defend Amazon's e-commerce business from mobile rivals an experiment to mitigate mobile's threat to traditional e-commerce, with early reviews calling it unique but advising buyers to wait for a sequel a unique device, but you're better off waiting for the sequel. By September the $200 price cut signaled demand trouble, and on October 23 Amazon took a $170 million writedown on unsold inventory.
Now CTO Tom Szkutak has publicly conceded the pricing itself was wrong — an unusually direct executive admission that the premium strategy, not just execution, failed. The story traveled widely across eight syndicating outlets including The Verge, CNET, and Mashable, reflecting how closely Amazon watchers are reading the hardware program's stumbles.
First-order effects
- Amazon is stuck with Fire Phone inventory and carrier positioning built around a price point its own CTO now calls a mistake, days after booking the $170 million writedown on those same weak sales.
Second-order effects
- The admission lands alongside the $39 Fire TV Stick (launching at $19), suggesting Amazon is doubling down on cheap ecosystem-entry hardware rather than premium devices — a pricing philosophy correction applied to the next product line, not a rescue of this one.
Third-order effects
- If the pattern holds, Amazon's hardware strategy consolidates around subsidized, low-margin devices that drive Prime and media consumption, abandoning head-on competition with Apple and Samsung at the high end — with Lab126's premium ambitions the casualty.
The trend: Amazon consumer hardware is retreating from premium flagship pricing toward cheap, ecosystem-locked entry points, with the Fire Phone as the cautionary data point.