Future of Amazon consumer devices in question after Fire Phone failure
Amazon has gotten kudos in some circles for its fail-fast model. The company is known to quickly abandon initiatives and products that don’t take off fast enough (such as this year’s mobile wallet and private label diapers) without experiencing any apparent damage to the brand. But it looks like in the case of Amazon’s flash-in-the-pan smartphone, known as the Fire Phone, the e-tailer has failed not only fast, but hard.
The Fire Phone’s failure has reportedly resulted in a wave of layoffs at the company’s hardware development center, Lab126. This news has led to speculation about the future of many of the consumer devices Amazon has in the works.
According to an article in The Wall Street Journal, this is the first round of layoffs Lab126 has experienced since the department was created 11 years ago. The Journal reports that other Lab126 initiatives, such as a large screen tablet, are also being shelved or pared down, and that Amazon is either moving smartphone development to another department away from Lab126 or, according to some sources, abandoning the efforts entirely.
Lab126 has been responsible for the creation of 10 other consumer devices in the last year, including the Amazon Echo personal assistant.
Amazon’s Fire Phone met criticism from its rollout. The phone carried a $650 price tag without a contract (or $199 with a two-year contract with AT&T — the exclusive carrier for the Fire Phone). Also, many of the features with which the Fire Phone came equipped seemed unduly focused on pointing users back to Amazon.com’s e-commerce ecosystem.
The Journal article cites a laundry list of other consumer device projects that Amazon has been working on, many reportedly halted or scaled back; some, such as a kitchen computer, still in the works. The kitchen computer — code-named Kabinet, according to the article — is described as a hub for an internet-connected home, which would indicate that Amazon is continuing to make moves into the fledgling IoT market as it did earlier this year with Amazon Dash buttons.
While Amazon has not been without its device successes — the Kindle and the Fire Tablet — the Fire Phone’s failure has reportedly led to a large drop in morale, at least among the Lab126 hardware development team. While, according to Business Insider, the layoffs, only amount to a small portion of the 3,000 people Lab126 employs, there has also been a good deal of turnover at Lab126 due to what Business Insider quotes as being "shifting, and, at times, enigmatic priorities" for the department.
- Amazon Curtails Development of Consumer Devices – The Wall Street Journal
- Amazon’s Fire Phone is all about selling stuff on Amazon – RetailWire
- Amazon learns how to fail faster – VentureBeat
- Amazon cutting jobs in hardware division after Fire Phone disaster, says report – Business Insider
Is it a wise move for Amazon to pull back from the consumer device market and distance itself from smartphones? Is there another way that Amazon could successfully reenter the smartphone market without repeating the Fire Phone debacle?