Amazon is right to give up on Fire Phone

August 31 02:32 2015

Amazon.com’s foray into smartphones was always destined to fail. The e-commerce giant was simply way too late to the market. The Fire Phone didn’t have any compelling differentiating features (Dynamic Perspective was little more than a novelty gimmick) while it stuck with conventional pricing, putting it in direct competition with entrenched rivals.AmazonBuilding_jpg_800x1000_q100

It’s tempting to pin the blame on Jeff Bezos since he was reportedly “obsessed” with the Dynamic Perspective feature, which required incredible development resources and delayed the device for years, according to a former executive. It was hardly a surprise when Amazon took a $170 million inventory charge mere months later because the Fire Phone just wasn’t selling. The Wall Street Journal is now reporting that Amazon is giving up on Fire Phone. Despite the fact that it’s only been a year, it’s about time.

Amazon has reportedly laid off dozens of engineers at its hardware division, Lab126. The company has also restructured Lab126, consolidating two hardware development departments into one. A large-screen tablet may also be shelved as well as a few other odd devices like an image projector. Amazon is still hard at work on other hardware projects, though, like a computer that can take orders via voice commands or a different spin on a 3-D interface meant for a tablet.

The layoffs run counter to a Reuters report last year that Amazon was actually planning to dramatically expand its Lab126 head count over the next five years, even after it took the Fire Phone writedown and realized the product was a flop. For once in its life, Amazon seems averse to plunging an endless amount of money into a new initiative. Cost cutting is largely how Amazon crushed analyst estimates last quarter, posting a $92 million profit and sending shares soaring.

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