The Debacle of Amazon's Fire Phone

             

Details


Case Code : CLMM135
Publication date : 2017
Period : 2014-2015
Subject : Marketing Management
Industry : Smartphone Market
Organization :Amazon.com, Inc.
Length : 6 pages
Teaching Note : Available
Country : India

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The caselet discusses the debacle of the Fire Phone which was a major setback for global online retailing giant Amazon. The failure of the Fire Phone was attributed to its high price, limited features, small App store, late market entry, and lacklustre approach to prime customers. Reportedly, Amazon’s CEO Jeff Bezos’ (Bezos) focus on creating a high-end product instead of the kind of service that has always distinguished the company, proved imprudent. Despite the fiasco of the Fire Phone, Bezos remained committed to the company’s strategy of continuous innovation.

Issues:

» Discuss and debate the Fire Phone’s strategy
» Understand the reasons behind the failure of the Fire Phone.
» Examine the strategies Amazon should adopt to make a mark in the segments it plans to enter in the future.



Introduction

E-commerce giant Amazon.com, Inc.’s (Amazon) first smartphone, the Fire Phone, launched in 2014, was a major flop and reportedly cost the company hundreds of millions of dollars. Available in the US for US$199 (32GB) or US$299 (64GB) on a two-year exclusive contract with AT&T Inc, the Fire Phone was a disaster for the company mainly because it was overpriced and lacked compelling features compared to other Android phones in the smartphone market, said some analysts. Undeterred by its failure, Amazon CEO Jeff Bezos said the Fire Phone was a “tiny little blip” compared to some of the larger experiments his company was undertaking. Citing Amazon’s foray into the smartphone market as an example of the company’s healthy innovative spirit, Bezos said, “It is our job, if we want to be innovative and pioneering, to make mistakes and as the company has gotten big – we have $100 billion-plus in annual sales, 250,000-plus people – the size of your mistakes needs to grow along with that.” ...

Key words:
Fire Phone,New Product Development,Consumer Behavior,Smartphone Market,Innovation,Amazon">

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