Amazon is one of the great giants of the internet age and its CEO Jeff Bezos is an icon to many. But greatness does not ensure success as the story of Amazon’s Fire Phone shows. The fact that Bezos’ own involvement in the project is being deemed one of the main factors in its failure is yet another damning mark against the failed project. As prices plummet and two stories from Fast Company are released, Jeff Bezos has started copping a lot of heat for the failed Fire Phone and it is starting to look really ugly.
Fast Company has published two articles recently which deal directly with Bezos and the phone. One purports to tell the real story behind the debacle. Charges like micromanagement are being laid at his feet as it is revealed that he acted as a “product manager” for the Fire Phone. The fact that he was the driving force behind the project does not look good and the usually successful CEO is starting to look a little shaky. Having the title “his baby” put on the failed phone experiment is a stain on Bezos’ usually bright reputation.
Packed with unique features and a subscription to the popular Amazon Prime, the Fire Phone looked like a good idea. Expectation and reality diverged, however, as it failed to grab much of a market share. Competing against mobile giants like Apple and Google’s Android was always going to be a tough go, but Amazon seemed like the one to do it. Nevertheless, it failed to take into account the fact that most consumers’ needs were already adequately met. As Wired put it, the only people who needed an Amazon phone in their lives was Amazon itself. That is one of the key reasons why the Fire Phone failed in the first place.
Other reasons for failure can be laid at Bezos’ feet. The expensive Dynamic Perspective feature that let the phone simulate a 3D interface was unique. In fact, no other phone could boast that kind of feature at all. But the way it sapped battery life and failed to act like the intended Amazon version of Siri was a drawback, not a selling point. Functionally, it just did not deliver, except maybe in the mobile gaming category, which is a relatively small part of the complete package. The fact that it was also an expensive feature to design and develop, what is being termed a “surreal” amount, also did not help matters.
Further problems seem to lie with Amazon’s research and development department, known as Lab126, which is now undergoing a huge shake-up and reorganization. There have been a host of departures from the department, leading to the tweaks being made. Some may see this as an indictment of the department and Bezos after the failure of the Fire Phone. Others are calling it a doubling down, however, noting that it represents Bezos confidence in the department and its ability to develop hardware for consumers. Whatever the case really is, Lab126 still has to take on Google and Apple in the hardware market and that remains an uphill battle.
Somewhat worryingly, the failure of the Fire Phone has been contiguous with the slowing of its growth and profits. In October, a huge net loss was announced, totally $437 million for the quarter. No company wants to see that kind of news and neither do their investors and shareholders. The company’s usually high growth rate is also slowing. How much of this can be laid on the failure of the Fire Phone and Jeff Bezos’ involvement in the project is hard to say, but he could possibly cop a lot of heat for that as well. Hedge-fund manager David Einhorn had harsh words about these reported losses and predicted even more losses in the future. Whether Bezos’ genius can overcome this doom and gloom prediction remains to be seen, but judging from the reactions about the Fire Phone debacle, he will probably shoulder some responsibility for that as well.
By Lydia Bradbury
Photo by ptufts – Flickr License