PERTH: Not too long ago, the talk was about how Nokia should learn from Amazon. How the e-commerce giant had cleverly made its mark in the tech world and even managed to churn out best-selling devices during the Holidays. It was known for effectively camouflaging the Android OS to push in its own services and app store on the Fire OS. From tablets and e-readers to e-commerce and TV entertainment, the company has been all over the place over the past couple of years.
At the Business Insider conference, Bezos explained it as, “It’s kind of like we built this lemonade stand 20 years ago, and the lemonade stand has become very profitable over time, but we also decided to use our skills and the assets we’ve acquired to open a hamburger stand, a hot dog stand—we’re investing in new initiatives.”
So far, even without making much profit, everything had worked for Amazon, until the smartphone debacle came along. The ambitious Fire Phone was one of the year’s biggest flops. Now, we wouldn’t doubt Amazon’s motive for building a phone.
At that point in time, it seemed just the right move. After all, Amazon is known to build products that are future-ready. With everyone moving to smartphones, that was the only way it could stay connected with its users. Moreover, it had to deal with the impact of the falling tablet sales. Moreover, selling its services on other platforms would mean a cut in its already thin profit margins.
However, what’s worrisome is the fact that Amazon reported $437 million net loss in October 2014, the biggest in the last 14 years. In fact, the Fire Phone that was launched for $199 on contract soon began selling for as low as 99 cents (obviously with contract).
Moreover, Amazon is known to have a large unsold inventory of the phone. Was it Amazon’s ambition to be a jack of all trades and master of none or too many resources were poured into building the Amazon Fire phone? Fastcompany’s Austin Carr spoke to several current and former Amazon employees to know what really went wrong with the Amazon Fire phone.
It is known that Amazon CEO Jeff Bezos prefers to invest in things that will drive business in the future rather than what brings profit today.
Citing former Microsoft CEO Steve Ballmer, the report states, “They make no money! In my world, [that’s] not a real business. I get it if you don’t make money for two or three years, but Amazon is, what, 21 years old?”
However, Carr points out that this time the criticism has surpassed it all and critics believe Bezos has lost focus.
“Understanding Amazon’s journey to create a smartphone, and why it failed, is perhaps the best way to understand the company’s evolving mission and values as it struggles to unearth its next gusher of revenue. Because the Fire Phone, as with most big innovations inside Amazon, came straight from Bezos’ brain. As one founding team leader of the project puts it, “This was Jeff’s baby,” adds the report.
The project codenamed Tyto went on floors in 2010, the same time we saw the iPhone 4 from Apple. Amazon is believed to start every project keeping the consumer needs and desires and then work to achieve them. However, this time, the consumer was Jeff Bezos himself. The report clearly suggests that it looked as if he was building the phone for himself, rather than consumers.
“Bezos, insiders say, was “the product manager” on the Fire Phone. (One research scientist refers to him as the “super product manager.”) “Even the very smallest decisions needed to go through him,” says a former senior member of the team that developed the Fire Phone’s cameras, recalling how Bezos personally chose to include a 13-megapixel camera rather than an 8-megapixel one,” points out Carr’s report.
Bezos got himself closely involved with everything related to the phone – software and hardware. While initially it looked like a perfect CEO caring for his products, it later got frustrating for the design team. “In essence, we were not building the phone for the customer—we were building it for Jeff,” the designer told Carr.
Moreover, he was reportedly driving the team on one specific feature – Dynamic Perspective. Yes, the 3D engine that doesn’t require 3D glasses and is allows efficient viewing from every angle. It’s also essentially what went wrong with the phone. When a team failed in achieving the same effect, the company started re-hiring for the same.
