The technology world was ablaze over Amazon’s Fire Phone when it debuted in June, but a new pricing paradigm may suggest that sales are not as hot as the e-commerce giant would like.
AT&T is offering a deal on the Android-powered Fire phone. You can now buy the 32 GB model for just 99 cents when you lock into a two-year contract. Making the pot a little sweeter, Amazon is also offering 12 months of Prime membership free for a limited time.
Prime membership includes unlimited streaming of thousands of movies and TV shows from Prime Instant Video, along with access to over 1 million songs to download or stream from Prime Music, over 500,000 books you can borrow from Kindle Owners’ Lending Library, and free two-day shipping on millions of products.
What Differentiates Fire?
AT&T has the exclusive, and was selling the device at $199 for 32 GB or $299 for 64 GB of internal storage with a two-year contract. It’s the first-ever 3D smartphone, though it may behave as much like a mobile vending machine as it does a mobile phone given the Prime access.
The Amazon Fire Phone sports a 4.7-inch IPS screen, a 13-megapixel camera with image stabilization, a quad-core 2.2 GHz processor, 2 GB memory, and unlimited photo storage on Amazon Cloud Drive.
Amazon does have some competitive differentiators, like Dynamic Perspective and Firefly. Dynamic Perspective uses a new 3D sensor system to respond to the way you hold, view, and move Fire. It promises to make possible one-handed gestures, immersive apps and games, and real-time updates.
Firefly combines Amazon’s catalog of physical and digital content with image, text and audio recognition technologies that identify Web and e-mail addresses, phone numbers, QR and bar codes -- and over 100 million items including movies, TV episodes, songs, and products. You can see product details, add items to your Wish List or order them on Amazon.com.
What Should Amazon Do?
We caught up with Roger Entner, principal analyst at Recon Analytics. He told us he’s not surprised that the price dropped.
“Usually when you drop from $200 to a buck it means the demand is not as high as you thought,” Entner said. “And so they need to move inventory and it shows that Amazon’s strategy of going high-end, which is completely counter to what they did with everything else, is not working.”
When the Fire phone debuted, some analysts and journalists said they weren’t expecting such a high-end phone from Amazon. Consumers may not have, either. Entner said consumers look to Amazon for high-quality but primarily affordable equipment.
“This also shows that the handset market has turned into something of Samsung and Apple and the rest of the world. Amazon just got a reality check that it’s part of the rest of the world. It’s unfortunate,” Entner said. “Next time maybe they will come out with a really good affordable device.”