Amazon Fire Phone: Gimmicks Are Not Resonating With Buyers

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Credit: Steve Jurvetson

Two months ago at a much-hyped event in Seattle, CEO Jeff Bezos unveiled the Amazon Fire Phone. Using "breakthrough innovations," the phone would let users "see and interact with the world through a whole new lens," the company said at launch.

[ Video Review: Amazon Fire Phone]

From the start, those "breakthrough innovations" struck many people as gimmicky. A report out today from mobile ad platform Chitika seems to confirm that sales of the Fire Phone aren't exactly on fire. While Amazon has a good track record of shaking up markets -- both in online sales and the cloud -- it's not off to a great start in the mobile phone market.

Chitika examined "tens of millions" of ad impressions on its network of 350,000 Web sites after the launch of the Fire Phone. It found that after 20 days, the Fire Phone accounted for just .02 percent of North American smartphone Web traffic.

Since Amazon doesn't release sales volume for its Kindle Fire tablets, it's unlikely to share sales figures for the Fire Phone. So while ad impressions from the likes of Chitika don't offer an exact correlation to sales volume, they do offer a hint at market share.

Chitika concludes that limiting the Fire Phone to one carrier is playing a big role in its lackluster performance.

Chitika also graphed ad impressions for the LG G3, which launched on multiple carriers, and the Motorola Droid Ultra, which launched only on Verizon. The LG G3 phone took off notably after it became available on all networks. Limited to one network, the Motorola phone had a similar growth trajectory as the Fire Phone.

lg g3 v amazon fire phone chitikainsights Chitika

If Amazon thought that offering the Fire Phone exclusively on AT&T would have a similar impact as when Apple offered the iPhone exclusively on AT&T, it was sadly mistaken. While the Fire Phone has some unique features, the market doesn't view them as revolutionary as the first iPhone.

Breaking into the mobile phone market is notoriously difficult (remember when Google tried to sell phones directly to users?), partly due to the control the operators exert over the market. That may limit the ways that Amazon can try to differentiate its phone in order to disrupt the market the same way that Amazon did with online sales and cloud. For instance, many people expected Amazon to come out with a unique pricing model to offer the phone at a very low cost. Instead, the phone launched at a typical $200, with a contract.

Offering the Fire Phone on more carrier networks will surely spur some sales. Plus, Amazon has the chance to make improvements. This week it began pushing out an update to the phone designed to improve battery life and allow users to pin apps to the carousel, among other minor changes. But it will take a lot more than those changes before the Fire Phone will really take off.

This story, "Amazon Fire Phone: Gimmicks Are Not Resonating With Buyers" was originally published by CITEworld.

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