Posted Fri Oct 31, 2014 at 08:30 AM PDT by Steven Cohen
Initial pricing is likely to blame for the smartphone's sluggish sales.
After revealing troubling financial numbers related to its Fire Phone last week, Amazon has begun addressing the possible reasons behind the mobile device's slow start in the market. In an interview with Fortune, the company cites initially high pricing as its main problem.
Speaking to Fortune, Amazon Senior Vice President of Devices David Limp discussed the company's failed pricing strategy. When the Fire Phone was released back in July, rather than offer a more affordable alternative to the competition, Amazon stuck with the pack and adhered to a standard smartphone price tag of $199 with a two year contract. Limp now believes that this was a clear misstep. With that in mind, prices were adjusted in September, bringing the phone down to just 99 cents with a two year contract. Though exact numbers are not available, Amazon says this has led to significantly better sales. Likewise, the company has also released software updates that have corrected many of the issues users were having with the phone.
Though the company admits the Fire Phone has had a bumpy launch, it reiterated its long-term commitment to the device, promising more software updates and improvements in the future. The Fire Phone is currently available for prices ranging from 99 cents to $449 depending on the service agreement.
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