With Black Friday and Cyber Monday quickly approaching, Amazon has again dropped the price for its first smartphone, the Fire. Previously listed at $449 for the unlocked version, the 32 GB Amazon Fire phone without contract is now priced at $199.
Rolled out by Amazon this past July, the Fire has met with a cool reception from reviewers and consumers. The smartphone's underwhelming sales were reflected in Amazon's third-quarter earnings report, which included a $437 million net revenue loss with a $170 million write-down related to Fire expenses.
David Limp, Amazon's senior vice president of devices, acknowledged in a Fortune interview last month that the company erred by pricing the contract-based (as opposed to the unlocked) Fire at $199.00 (32 GB) and $299.00 (64 GB). The same article also noted that Amazon Chief Financial Officer Tom Szkutak revealed the company was sitting on an $83 million surplus of unsold Fire phones.
Lukewarm Sales and Reviews
Unveiled with great fanfare in June, the Fire features an Amazon-centric design that provides users with quick access to the online retailer's products and content. An InfoWorld article this week said the Fire "isn't so much a smartphone but a portable product scanner and ordering device tied to a single vendor that also happens to make phone calls."
This week's price cut isn't the first that Amazon has made in an effort to jump-start Fire sales. In September, the company dropped the phone's price to 99 cents with a two-year AT&T contract. That price cut -- announced a day before Apple took the wraps off its iPhone 6, iPhone 6 Plus and Apple Watch -- helped to improve sales, according to Limp.
Such moves, however, haven't done much to boost the Fire's reputation with consumers. Out of 3,812 reviews posted on Amazon's page for the 32 GB model with an AT&T service plan, the ratio of one-star to five-star reviews was 2,009 to 800, with an average rating of 2.4 stars. Among the leading customer complaints is the Fire's limited number of apps, along with poor battery life and navigation difficulties.
Holidays Start Early
Designed with a 13-megapixel camera and a 4.7-inch HD display, the Amazon Fire features a 2.2 GHz quad-core processor and 2 GB of RAM. For a limited time, it also comes with a year of Amazon Prime, normally a $99-per-year service that offers free two-day shipping, unlimited streaming of movies and TV shows and book borrowing through the Kindle Owners' Lending Library.
Having kicked off its holiday shopping season weeks ahead of Black Friday, Amazon is clearly banking on a big end-of-the-year boost in sales. Whether the Fire ends up playing a big role in those sales remains to be seen.
In a report on early-season holiday sales released Tuesday, Gian Fulgoni, chairman emeritus of the analyst firm comScore, predicted "another exceptionally strong year of growth in online buying on Thanksgiving, which could push sales as high as the $1 billion mark on that day." The firm foresees a 16-percent increase in online and mobile holiday shopping sales, hitting a total of $61 billion.