Amazon exec admits pricing misfire – report

Amazon exec admits pricing misfire – report

03 NOV 2014

Amazon’s devices head David Limp admitted that the e-commerce giant had made a mistake with its pricing of the Fire smartphone at launch, shortly after the company announced a $170 million charge associated with the product.

In an interview with Forbes, the SVP of devices said: “I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we’re also willing to say ‘we missed’. And so we corrected.”

When Fire was announced earlier this year, it was priced at $299 with a two-year service contract, and exclusivity with US operator AT&T. This was subsequently cut to $0.99 with contract, with similar low prices also supporting its introduction in Germany and the UK.

Limp also told Forbes that two software updates had dealt with some of the problems customers encountered with early devices. “We’re going to keep iterating software features to get it better and better,” he said.

The Fire smartphone has received mixed reviews (to say the least) on Amazon’s own website, with much of the criticism centring on the lack of some core apps on the company’s store. While the company has been working hard to engage developers, the relatively small market for Fire products means that it is not a priority platform.

Amazon’s Fire OS platform is shared with its Fire tablet line, meaning development work for one product line is available on others – and so the Fire phone does not have to bear all of the cost for operating system development. This also widens the addressable market for developers.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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