Although tons of people will be opening up new phones on Christmas morning, it’s likely that only a teeny-tiny percentage will be unwrapping Amazon’s new Fire Phone.
Since it launched over the summer, the phone has cost Amazon $US170 million in unsold inventory and other related costs.
Lousy sales for Amazon’s smartphone and its new Siri-like speaker, Echo, haven’t dented the company’s optimism, Sarah Mishkin writes for The Financial Times. Amazon’s approach to product launches, she says, is an evolutionary cycle of launch, improve, repeat.
Indeed, the team working on Fire has gone “back to the drawing board” and won’t release the next version until 2016, sources close to its development recently told VentureBeat. The company is rethinking which features will help get the phone off shelves.
At a Business Insider’s recent IGNITION conference, Bezos said that it’s still very early for the device and that Amazon plans to keep iterating on it for years to come.
Investors may feel frustrated — the company’s stock is down nearly 25% this year — Amazon has proved in the past that its strategy works. The Kindle Fire launched kind of weak as well, but sales were up 3x year-over-year this Black Friday.
Even if the next generation of the Fire Phone fizzles out too, CEO Jeff Bezos has said it won’t matter much to him.
“If you’re going to take bold bets, they’re going to be experiments,” he said at Ignition, after Henry Blodget asked him about the phone’s poor sales. “And if they’re experiments you don’t know ahead of time if they’re going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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