Amazon's Fire Phone flops — to the tune of $170 million


If you're looking to gift a cheap smartphone this Christmas — one that can't properly run apps such as Google Maps or YouTube, and is overshadowed by more well-known options such as the iPhone or Samsung devices — then Amazon has your answer.
The company's Fire Phone has reportedly seriously undersold, with The Guardian estimating that Amazon moved just 35,000 units in the first month (a typical first month of sales records more than a million sold units). Amazon released the new device in June as a competitor to top-end smartphone options, but the company quickly cut the Fire Phone's upfront cost to just 99 cents in response to disappointing sales. While Amazon did not include the Fire Phone's writedown in its third-quarter earnings statement, chief financial officer Tom Szkutak said in a later earnings call that the "consolidated segment operating loss includes charges of approximately $170 million, primarily related to the Fire Phone inventory evaluation and supplier commitment cost."
The Guardian estimates that Amazon still has between 200,000 and 300,000 unsold Fire Phone units in its warehouses.
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Sarah Eberspacher is an associate editor at TheWeek.com. She has previously worked as a sports reporter at The Livingston County Daily Press & Argus and The Arizona Republic. She graduated from Northwestern University's Medill School of Journalism.
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