Amazon is sitting on $86 million of unsold Fire Phone inventory and in order to start reducing the stock, the e-commerce giant has slashed $250 off the phone, costing only $199 off contract. The original price of the Fire Phone matched most of the high-end devices at $199 on contract, but quickly dropped to free on a two year deal with AT&T.
Amazon says this is a holiday deal for U.S. customers, but we wouldn’t be surprised to see the deal last for quite some time, or at least stay at the low-tier of smartphones. The new $199 price puts it in the same range as the Moto G and Nokia X, two low-end devices for users in Asia. Two year old iPhones and Android devices are still going for more off contract.
Even with this insane price drop, Amazon may still lack the customer support it needs to get rid of inventory. Customers do not seem happy with the Fire Phone, especially if they bought it for full price one month before the price drop.
The two key features — the 3D display and Firefly — both feel like gimmicks that will wear off after a few months use. Firefly also feels like a better service for Amazon to sell you stuff, not really what the customer wants after spending money on a new phone.
Amazon reported a $544 million loss in Q3 and expects even worse numbers in Q4. The Fire Phone is a large part of the operating loss, but Amazon is also losing money on other ventures, making investors question the future of the company.