Fire Phone: The Rise and Fall of Amazon’s Smartphone Dream
“Failing Forward” is a series of case studies exploring product failures from various tech companies.
Recently, I read Amazon Unbound and was inspired by its first part, which explores Amazon’s growth and expansion beyond its original dominance into new areas such as smart devices and artificial intelligence. It is fascinating to consider that each successful product or business we know today may have been born out of failure and required countless iterations, long-term investment, and risk tolerance.
Amazon’s hardware development is a great example of this. To complement the Kindle family, Jeff Bezos, the founder of Amazon, worked closely with engineers at Lab126 to create several innovative projects, including the Kindle Fire Tablet, Fire Phone (ultimately discontinued), Shimmer (never launched), and Alexa.
As someone who has worked in the smartphone industry, I am particularly interested in the Fire Phone. From my experience working with stakeholders like suppliers, wireless carriers, and smartphone brands, I’ve seen firsthand how these parties work together to launch products and resolve design issues in response to market demand.
The Fire Phone was Amazon’s first attempt to enter the smartphone market in 2014. It boasted 3D-enabled technology and was manufactured by Foxconn. However, it failed to capture the attention of consumers, resulting in $170 million of unsold inventory and related costs.
Despite its commercial failure, Amazon’s experience with the Fire Phone is a powerful example of “failing forward” — using failure as an opportunity to learn and improve. I am particularly interested in understanding Fire Phone’s product design, as well as how and why it was ultimately discontinued.
The Tyto Project
In 2010, around the time of the launch of the Apple iPhone 4, Amazon began developing its own smartphone, codenamed “Tyto,” following the success of its Kindle line. Jeff Bezos was heavily involved in the phone’s development and envisioned a list of innovative features.
“…envisioned a list of whiz-bang features… NFC for contactless payments, hands-free interactions to allow users to navigate the interface through mid-air gestures and a force-sensitive grip that could respond in different ways to various degrees of physical pressure…”
One feature that Bezos was particularly enthusiastic about was Dynamic Perspective, which used front cameras and infrared lights to create a 3D on-screen image. However, progress on the phone’s development was slow, and the project was eventually split into two: “Duke,” targeting the higher-end market, and “Otus,” a low-cost alternative. Ultimately, Bezos decided that only one phone could compete with existing brands, and a low-end design could damage the Amazon brand.
In July 2014, the Fire Phone was finally released after several years of development, with a pricing range on par with iPhone and Android flagship smartphones. However, sales were disappointing, and the price was cut significantly only six weeks after its launch. Then, the smartphone was no longer available on Amazon’s website in September 2015, one year after its launch.
The Product Design
Hardware Specifications
The Fire Phone featured a 4.7-inch IPS LCD display with a resolution of 720 x 1280 pixels, providing a pixel density of 315 ppi. It sported a 13 MP rear camera with LED flash and a 2.1 MP front-facing camera. The device was powered by a Qualcomm Snapdragon 800 processor with an Adreno 330 GPU and 2 GB of RAM. It offered internal storage options of 32GB or 64GB, but there was no option for expandable storage with a microSD slot. The battery, with a capacity of 2400 mAh, was non-removable and provided up to 22 hours of talk time and up to 85 hours of standby time, as claimed by Amazon. Check GSMArena for detailed specifications.
In terms of design, the Fire Phone had a glass front and back with a rubberized frame for grip. It had a physical button on the left side for activating the Dynamic Perspective feature, and four additional front-facing cameras for gesture recognition. The device also had dual stereo speakers with Dolby Digital Plus audio technology.
According to a product teardown by iFixit, the estimated BOM (bill of materials) of the Fire Phone was around $205. This figure is higher than that of the iPhone 5S but lower than that of the Samsung Galaxy S5. However, iFixit gave the Fire Phone a low repairability score of 3 out of 10 (10 is easiest to repair) due to several factors, such as the need to include four Dynamic Perspective replacement cameras in a replacement display assembly or the extra work required to transfer the cameras. Additionally, the design was not modular, meaning that several components shared cables, increasing the cost of replacement parts.
Software and User Interface
Similar to Amazon’s Kindle Fire tablets, the Fire Phone operated on Amazon’s proprietary Fire OS, which was a modified version of Android. The Fire Phone came preloaded with Fire OS 3.5 based on Android 4.2 Jelly Bean. The operating system featured a custom user interface that highlighted Amazon’s services and came with pre-loaded applications such as Amazon Appstore, Prime Video, Amazon Music, Amazon Silk, and Audiobooks.
A three-panel design was also introduced with the Fire Phone for apps, with the leftmost panel displaying settings, the center panel acting as the main screen for apps, and the rightmost panel reserved for app-specific features known as “delights”. Additionally, photos taken with the Fire Phone were automatically backed up to Amazon’s Cloud Drive, with unlimited photo storage offered by Amazon for this device.
Mayday and Firefly were unique features of the Fire Phone. Mayday was a 24/7 customer support service that enabled customer service representatives to access the device to show users how to perform specific functions. Firefly utilized the camera and microphone to recognize objects that could be purchased from Amazon, such as media, or to extract useful information like addresses and phone numbers.
One of the main criticisms of Fire OS was its limited app selection, as it did not support the Google Play Store and relied solely on Amazon’s own Appstore. This meant that many popular apps were unavailable on the Fire Phone.
Dynamic Perspective
Dynamic Perspective was a notable feature of the Fire Phone that utilized four front-facing cameras to create a 3D-like effect on the device’s screen. The cameras were positioned at the corners of the phone’s front side and utilized invisible infrared illumination sensors, similar to those used in Microsoft’s Kinect sensor, to detect a user’s head position and distance from the phone.
The feature was primarily used in games, lock screens, and maps, but Amazon also incorporated it into app icons, which would move as the phone was tilted or the user’s head was moved. While some praised the innovative nature of Dynamic Perspective, others found it gimmicky or experienced motion sickness.
Despite its mixed reception, Dynamic Perspective was an early example of a technology that paved the way for similar features in later devices, such as Apple’s Face ID and Samsung’s Intelligent Scan. The use of multiple cameras and sensors for facial recognition and detection has become more common in smartphones and other devices, showing how Amazon’s attempt to innovate in this area had a lasting impact on the industry.
The Smartphone Market
The Fire Phone faced a tough challenge in the highly competitive smartphone market, with exclusive availability on AT&T limiting its potential reach to customers, according to an Engadget review. While this strategy worked for the original iPhone in 2007, times have changed, and Amazon lacked the influence to convince members to switch platforms or carriers, especially with the added cost of a $200 on-contract price.
To sweeten the deal, Amazon offered a free year of Prime membership, valued at $99. However, the Fire Phone faced stiff competition from established brands like Apple, Google, HTC, Samsung, and Nokia, which boasted better displays, faster performance, stronger ecosystems, and, in most cases, longer battery life. The high price point of the device was a significant barrier for many potential customers, and sales were sluggish out of the gate.
In an attempt to boost sales after six weeks after its release, Amazon drastically lowered the price of the Fire Phone to just $0.99 with a two-year contract on AT&T, which was a huge drop from the initial $199 price tag. The off-contract price, on the other hand, went from $650 down to $449. Unfortunately, this move was widely criticized as a sign of desperation, and it may have further hurt the phone’s image in the eyes of consumers.
In November 2014, the price for the unlocked version dropped to $199, and it dropped further to $179 in April 2015. After a further price drop to $130 in August 2015, the device eventually became unavailable on the Amazon site.
Wrapping Up
Despite Amazon’s success as an e-commerce giant, its attempt to break into the competitive smartphone market with the Fire Phone was ultimately unsuccessful. One of the primary reasons for this failure was the high price point, which put it in direct competition with well-established brands like Apple and Samsung. Additionally, Amazon’s inconsistent pricing and marketing strategy, which included dropping the price from $199 to 99 cents before discontinuing the phone altogether after just one year, left consumers confused.
Moreover, the Fire Phone’s exclusive deal with AT&T meant that it had limited appeal, as many consumers expect more flexibility in terms of carrier options. Being locked into one carrier was a significant disadvantage for many potential buyers.
Another major issue was the limited app selection. The Fire Phone did not support the Google Play Store and instead relied on Amazon’s own Appstore, making it less appealing to users who wanted access to a wider range of apps.
Finally, while the Dynamic Perspective technology was innovative, it was not enough to make up for the other shortcomings of the Fire Phone. Critics and users had mixed opinions on the feature, and it was not enough to make the Fire Phone stand out in a crowded market.
Amazon’s reputation as an innovative company doesn’t guarantee success in the hardware space. The Fire Phone serves as a valuable lesson that a unique idea alone isn’t enough — proper execution and timing are also crucial factors.
