The Fire Phone was released with much fanfare last summer and promptly became “just another phone” – lost in the sea of new phones on the the market – and one of Jeff Bezos's biggest flops yet (and they've had a few). It was originally priced at $199 with a contract and supposed to compete with the iPhone. It now sells for $0.99 and Amazon has taken a $170 million write-down largely due to unsold Fire Phone inventory. It seems that, instead of Bezos's usual guiding principle for Amazon of starting with the needs and desires of the customer and working backward, Bezos tried to channel Steve Jobs and make the customer come to Amazon. A more astute research plan may have been able to sidestep this poor launch. Here are some missed opportunities:
- Wrong Research Objective: It's not enough to find out if consumers will like the changes. The real question is whether consumers will buy the new product when faced with the actual purchase decision. Reviewers of the phone found the features gimmicky (remember the big deal they made about Dynamic Perspective? What was that anyway?). They also took issue with the phone's bland design and terrible ecosystem. In short, Bezos seemed to simply release a phone with differentiating factors (important in a new product launch) but with factors that no one really cared about. The research objective seemed to focus too much on being unique and not enough on being an appealing overall package that consumers would trust as their primary device.
- The product configuration was less-than-optimal: This is the sort of thing that should have been caught pre-launch by even a simple concept test. Consumers had no interest in the anchor features that were driving the launch communications. This is something that could and should have been caught and remedied prior to launch. Bezos has been quoted acknowledging the phone's initial failures, saying it is "going to take many iterations” and “some number of years” to get it right, but at least some of these iterations and maybe even some years (and certainly millions of dollars) could have been saved by doing proper testing prior to launch.
- A communications failure: Amazon is one of the world's, and certainly America's most admired brands, and part of that positive brand equity comes from their customers depending on them for many key purchases. They have successfully launched the Kindle line, including the Kindle Fire in the past and consumers have shown a willingness to trust Amazon with their electronics budgets. But the Fire phone launch strategy failed to highlight for consumers why they should move their smartphone over to the Amazon ecosystem. The core of the launch strategy seemed half-baked and should have been more refined prior to launch.
Launching a product such as the Amazon Fire Phone is not easy and there are many ways a launch can go bad. Each of the myriad of problems is avoidable, and not making sure they are all solved can doom even a well-publicized launch from a respected company like Amazon.