Amazon announced their entrance into the mobile smartphone market back in mid-June with the announcement of their seemingly innovative Fire Phone. Having had great success selling their line Kindle Fire tablets, they thought they had what it takes to play with the big boys and compete in an entirely new market, a decision that ended up costing them heavily.
The first red flag came when sales figured emerged stating the device had sold a measly 35,000 units after 32 days of being on the market. While that may seem like a lot to some readers, Apple sold 7 million iPhone 5s units Samsung pushed 5 million of their flagship Galaxy S5s in the same timeframe.
Just a week after the sales report went public, Amazon was in damage control and slashed the price from $200 on-contract to a mere $0.99 for anyone who signs a two-year commitment. Such a heavy discount in a two month span spelled real trouble for the future of the Fire Phone and the device has been proven to be an utter failure.
How much did the Fire Phone cost Amazon in the end? The answer is more than you probably think. Due to a poor decision to buy a large surplus of inventory ahead of launch, Amazon is in deep as they still have tens of millions of dollars in unsold inventory that had virtually no demand.
Exactly how much unsold stock are they stuck with? A whopping $83 million worth.
You know it is bad when Amazon customers are giving the Fire Phone an average rating of 2 out of 5 stars with 3,100 reviews: