Amazon Fire Phone Discontinued After $170M Write-Down and 13 Months on Sale
What happened
Amazon discontinued its Fire Phone in September 2015, just 13 months after its June 2014 launch. The company took a $170 million inventory write-down on unsold units. The phone launched at $199 with an AT&T exclusivity deal but found almost no buyers. Its headline feature — a gimmicky 3D head-tracking effect — added cost and complexity while solving no real user problem. The limited app ecosystem and forced Amazon integration alienated mainstream buyers.[1]
What went wrong
Amazon designed the Fire Phone primarily as a hardware storefront for its own services rather than a compelling device for users. The Dynamic Perspective head-tracking 3D feature consumed significant engineering resources but offered no practical benefit. Priced identically to an iPhone 5s but offering a fraction of the app library and locked to a single carrier, it had no competitive advantage in its market.[1]
Lesson learned
Feature differentiation must solve user problems, not company monetisation goals. A phone whose selling point is a motion-tracked 3D effect is a product designed around a demo, not a use case. Amazon later re-entered hardware with Echo — a device with a clear, distinct use case — and succeeded.
Sources
- [1] TechCrunch Amazon officially kills the Fire Phone