by Bill Snyder

Amazon Sells Fire Phone for $1, but It’s Still Not Worth It

Sep 09, 20143 mins
Consumer ElectronicsMobileSmall and Medium Business

A mediocre product and AT&T exclusivity are a couple of reasons why Fire phone sales have been weak, according to Bill Snyder. In response to sorry sales, Amazon cut the price of its first phone to a single dollar.

Now and then I tip my hat to a company that goes out of its way to provide excellent customer service. Today I’m tipping my hat to the consumers who were too savvy to spend their hard-earned money on a second-rate product: Amazon’s Fire phone.

Sales of the Fire phone have apparently been so poor that the giant online retailer on Monday cut the price from $200 to $0.99. Talk about a fire sale. But wait, as they say in the infomercials, there’s more. If you sign up soon you also get one year of Amazon Prime for free!

I say “sign up” because one of the Fire Phone’s biggest weaknesses is the exclusive deal Amazon signed with AT&T. Ma Bell is the only U.S. carrier that offers the phone, and if you want it you have to sign a two-year contract. (You can read all the details here.) All of the major carriers are moving away from two-year lock-ins, which makes the decision to restrict users to one carrier all the more puzzling and annoying.

It’s obvious to me that the only real reason to buy a Fire Phone is to shop more at, using your phone. Sure, you can place calls and do the all regular stuff on the Web. The interface also has some interesting features, but the real point of the product is to put extra money in Jeff Bezos’s already well-lined pocket by buying more stuff.

Amazon seems to have mostly relied on gimmicks here instead of releasing a killer phone to compete with the big boys. The specs are all pretty ho-hum; the look is not particularly new or modern — HTC One, it ain’t; and Amazon really seemed to rely on just a few key features to sell the Fire phone to the masses and distinguish it from competitors.

There were signs of trouble for the Fire Phone almost immediately. It wasn’t well received when it launched in June. Last month, online ad platform Chitika examined “tens of millions” of ad impressions on its network of 350,000 websites following the Fire phone launch. It found that after 20 days, the Fire phone accounted for just .02 percent of North American smartphone Web traffic. If Chitika was wrong, Amazon certainly could have refuted the report, but it chose not to.

The $0.99 deal gets you the 32GB Fire phone; if you want one with twice the storage you’ll have to spend $100, which is $200 less than the original retail price.

My guess is that the price cuts won’t do much to save this mediocre device. I say: Well done, consumers!