The Fire Phone Debacle and What It Means For Amazon's Future 155
HughPickens.com points out an article at Fast Company that dug into the creation of Amazon's floundering Fire Phone to figure out why the company pushed so hard to bring it to market. The piece is an indictment of Jeff Bezos's determination to make the Fire Phone into a competitor for an already-saturated high-end smartphone market. "This wasn't some vague guideline from an executive busy running other parts of the business; based on interviews with more than three dozen current and former employees, most of whom were deeply involved with the project, the CEO drove every aspect of the phone’s creation from the outset."
Now that Amazon's growth is slowing and profits have yet to be seen, investors and analysts have run out of patience for gambles like this one. "What makes the Fire Phone a particularly troubling adventure, however, is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. It’s understandable that Bezos would want to give Amazon a premium shine, but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided."
Now that Amazon's growth is slowing and profits have yet to be seen, investors and analysts have run out of patience for gambles like this one. "What makes the Fire Phone a particularly troubling adventure, however, is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. It’s understandable that Bezos would want to give Amazon a premium shine, but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided."
where did Amazon service suffer as a result? (Score:4, Insightful)
> "but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided."
What service suffered as a result of this? The product ended up not being what was desired by the public, but what specifically would have fixed this? Just saying "with 20-20 hindsight, that wasn't a good use of your time" is meaningless. When you have built a multi-billion dollar business, you can claim that you have better judgement, until then you are just making noise
David Lang
Re: (Score:3, Insightful)
Because if I wanted to own shares in a VC fund, I'd buy shares in a VC fund. Investors in AMZN are generally trying to buy shares in a potentially-profitable retailer, not trying to fund Bezos' personal whims.
Re: where did Amazon service suffer as a result? (Score:2, Interesting)
Remember when he got into virtual hosting on a whim? How about when he got into the Ebooks market on a whim? No one can forget the crazy time he decided to become a digital media provider...on a whim!
The real reason that this is an issue is that people know how much money flows through amazon and when they saw the stock offering they thought they could pump and dump the stock like Facebook and a thousand others.
This whole "running a business" thing is an abstract concept to these people as it is so far disc
Re:where did Amazon service suffer as a result? (Score:4, Insightful)
So don't buy Amazon shares. Jeff Bezos is an innovative maniac always looking for the next hit and willing to gamble big. Amazon is down $100 since 2013, but if you are longer term (multi-year investor) that bought in Dec 2012 you are still up $50 a share or you still made 15% or 7.5% per year. Sounds pretty good to me. Seriously, if you want to cry go look at energy companies right now.
It is just whining from people who want more, more, more. We hear it time and time again: Apple isn't giving us important shareholders enough money, Jeff Bezos isn't giving us investors enough money. We want more, we're important, we're shareholders. Go buy a dividend stock and be quiet. It is a stock, there is no such thing as a sure thing. Just ask everyone who lost 10-years of retirement savings as the banks crashed the world economy and then were bailed out by the US Government. So much for the invisible hand of the market.
Re:where did Amazon service suffer as a result? (Score:4, Interesting)
Jeff Bezos isn't giving us investors enough money
Amazon has never given ANY investors any money, speculators on the other hand and Jeff Bezos himself has done remarkably well. If you your benchmark for wildly successful is wrapped in the stock price you are 100% correct. If you are an investor looking for a return, Amazon has basically done nothing.
So what if their sales have been wildly successful, can they actually make any money doing it is the problem.
Re:where did Amazon service suffer as a result? (Score:4, Insightful)
Because for now, it is still far more important to become a more and more dominating player in commerce than it is to make a big short term profit.
In most categories, you can buy a product on amazon, with free 2-day shipping at a 10% discount compared to most local shops.
The revenue flowing through amazon is mindboggling. Sure they could shrink that discount a bit, and grab a larger margin.
That would make it possible for other players to move in on amazon's market, and slow the company's growth.
The fact is that wall street, and amazon's investors are strongly supportive of the huge cash flow and slim profit margins of the company.
This is evidenced by the amazon shares sharply dropping every time the company makes a real profit. Investors still wants the company to grow, not make a profit.
And they have proven to be right. Some hack report in a trade rag won't change that.
Re:where did Amazon service suffer as a result? (Score:4, Insightful)
Not such a great investment after all...
Re: (Score:2, Informative)
I hear arguments like this a lot, in general, but they forget that the S&P 500 (or whatever) is a selection of stocks which is continuously changed, and if you "held" the S&P 500, you'd have to sell the companies that drop out of it or go bankrupt, and buy into the companies that enter it. And suddenly, the amazing returns of whatever basket of stocks disappears. It doesn't take many lemons in the mix to ruin the supposed gain.
Re:where did Amazon service suffer as a result? (Score:5, Informative)
False, the effect is not very great. Plus, do you not know what an index fund is (per GP)? The fund management takes care of that for you.
For example, the Vanguard 500 Index fund is indeed up 48% in that time period. If you'd invested $10,000 in the fund on 12/1/2012, then the value in your account would today be $14,843.15, with zero additional work on your part.
http://quotes.morningstar.com/fund/VFINX/f?t=VFINX [morningstar.com]
Re: (Score:2)
How is this informative? Do you not know what an index fund is?
Re:where did Amazon service suffer as a result? (Score:5, Insightful)
What a short sighted midget.
How do you think Amazon ended up as on of the world's largest companies, completely dominating all retail ecommerce, and being the sole leader in the booming cloud industry. If Bezos had asked VCs, banks or or anonymous cowards for advice advice he'd probably be the operator of a couple of walgreen's or McDonald's stores now. Or maybe owner of Blockbuster franchise. You can't build something new and successful if you don't take a few risks.
Re: (Score:3)
Comment removed (Score:5, Interesting)
Re: (Score:2)
You first say the Fire Phone will only succeed with non-forked Android. You then use the Kindle Fire as a success story. Do you not see the glaring contradiction?
Re: (Score:3)
You know they are a crap tech company because the "amazon" app on the kindle is harder to use than the browser, pointed at the amazon.com website.
Re: (Score:3)
Re: (Score:2)
Building a billion dollar service business is one thing. Making products is a different ball game.
Not saying the transition's impossible (IBM did it in reverse) but, you know, halo effect and all that.
growth is good... (Score:4, Informative)
Growth is good and all, and short termism is bad, butyou can't "make a loss on every sale but make up for it in volume" forever.
The window is closing. Amazon is huge, but so big now they face similar logistics problems to bricks and mortar stores. In addition all the nice little tax loopholes they used to profit from are rapidly closing so they from a tax perspective have to compete on an even footing with those bricks and mortar stores.
So, what's the future? They were massively dominant, but recently I've noticed they are not reliably the cheapest source for stuff any more. There are often better deals to be had elsewhere.
I don't see them vanishing any time soon, but think the glory days are ending.
Re:growth is good... (Score:5, Insightful)
I honestly don't care what brand of smartphone I have any more than I care what brand of business computer I have at work, in that the phones I buy run vanilla or close-to-vanilla Android, and the computers my work supplies for me generally run Windows, or I install Linux on them myself. The Fire Phone isn't really Android in that what I want to use Android for isn't there, and the experience would be just as foreign to me as using an iPhone or a Blackberry or a Windows phone.
Amazon over-valued their own brand. Amazon is a service more than a product, and attempting to be a product hasn't worked as well for them as they expected.
Re: (Score:2)
Re: (Score:2)
Ones that look like Johnny Depp when he goes on late-night TV for interviews?
Re: (Score:3)
In addition all the nice little tax loopholes they used to profit from are rapidly closing so they from a tax perspective have to compete on an even footing with those bricks and mortar stores.
Way to learn the wrong lesson ... instead of "huh, high taxes kill businesses, how about that", the lesson is {evil voice}"let no one escape"{/evil voice}?
Re: (Score:3)
Re:growth is good... (Score:4, Insightful)
Some 33% of the fortune 400 have inherited their wealth. All six children of Sam Walton are in fortune 400. The Koch brothers, for all their manipulation and access to the government would have more money if they had just invested their inheritance in index funds.
People without inheritance, even if they make it to top 1% by income, most of them will not be able to accumulate to make it to top 1% by net worth. Of the 97% of the Americans who don't inherit much, about 2% barely make it to a million net worth including their home equity. It takes 4 million to crack the 1% by networth mark. These low end millionaires with home equity are what counted to tout "95% of the millionaires are self made". Most of the people below the fortune 400 but in the top half of the 1% are all inheritors, with more than 15 million dollars of financial net worth. Working stiffs never get a shot at getting there.
These trust fund babies are not as smart as their daddy or mommy who made the dough. How many children of Nobel prize winners win Nobel prizes? It is called regression to the mean, and these trust fund babies are below average. They control some 50% of all the investments. They reward loyalty not competence. That misallocation of capital is detrimental to all of us. We need to tax estates with more than 5 million dollar worth significantly.
Re: (Score:2)
"and these trust fund babies are below average"
Well, usually they're closer to the average than their parents. That doesn't necessarily make them below average.
(Although we're speaking in very general terms, and we haven't defined what we're measuring, or how we're measuring it, or what "average" looks like....)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
A handful of these trust fund babies spent some 400 million dollars in a heavy
Re: (Score:2)
ERc = (ERr - beta * 0.2) / ( 1 - beta)
Where
ERc is the corrected expense ratio
ERr is the reported expense ratio
beta is the correlation coefficient with an underlying index, what fraction of the fund is made up of the index. Expressed as a fraction not percentage.
0.2 is assumed to be the typical expense ratio for an index fund.
A US Large cap fund bench marked against S&P 500 with an expense ratio of 1.2% and high correlation wit
Re: (Score:3)
No, the taxes are not high.
Exactly. Effective income and corporate tax rates are at historical lows. So according to the GP we should see a roaring economy with next to no unemployment. Oh wait...
Instead if you look back in history the times that had the highest effective tax rates, the 40s through the 60s, saw tremendous economic growth, huge swelling of the middle class and the wages of workers vs inflation wasn't effectively stagnant.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Way to learn the wrong lesson ...
Tax is the price of civilisation and I happen to like it. I live in a conutry with good transport infrastructure, almost perfectly reliable power, water and sewage, a decent emergency service system, safe food, safe products and so on and so forth.
And the lesson for taxes is most definitely: let no one escape. Otherwise you end up propping up some businesses at the expense of others. I don't see why on earth local shops should prop up amazon by paying for the infrastructure
Re: (Score:2)
I don't any more. I did for a while.
Actually I really liked it. The UK just doesn't have anything which can match New Mexico in a number of ways.
Re: (Score:2)
Taxes were higher during the 50s and 60s when the country had a booming economy and huge middle class.
Re: (Score:2)
Re: (Score:2)
I think in essence Amazon is a VC funded charity. Amazon has been great for consumers, driving down the cost of all sorts of products. For their VC backers, the returns have been less than stellar Amazon's model is to be the low margin competitor in each segment, ostensibly to drive out competition in the hopes of raising margins later. This doesn't seem to be happening as other competitors are matching or bettering their prices.
The washup being that Amazon will continue to exist, continuing to make minima
Re: (Score:2)
I don't know - there's convenience. I can get many many things via Amazon in 2 days, often before I could go to a store (I have to drive 20 miles from my house to any appreciable store like Target). I can subscribe for things so they just show up. I don't have to search a store to find them. And I know the security and return policy.
Is cheapest best? Sometimes, but if it means I need to wait a week or a month vs 2 days, that's maybe too long. If it means that I might not be able to return something if it ar
AT&T only phone, really? (Score:1)
I would have considered it if it hadn't locked you into AT&T. You want a phone to take off but you only support one provider? This made no sense to me and I will not use any carrier with metered service. FAIL!
"Growth is slowing" (Score:4, Interesting)
Gotta love investors that shiver at a slowdown of the second derivative of the growth curve. Amazon is still growing and the growth is increasing, just not a fast enough increase of growth growing.
Amazon is a huge successful brand with multiple obvious methods of income from product retail to cloud services.
This seems like a bunch of investors not liking how Bezos is spending their money.
First derivative (Score:3, Insightful)
Well its the velocity that's slowing so not second order derivative, its the first derivative, Amazon is still growing but the rate of growth is slowing, Google [Forbes Amazon Growth].
It makes no profit and already has successful and yet unprofitable cloud services. Cloud services won't fix the loss making business. The Fire phone doesn't work, and the Fire TV device doesn't sell enough to turn the company profitable.
Investors want returns, not brand. But when he starts making returns, then he gets a PE and
Re: (Score:2)
Wait, what? Second derivative of the growth curve would be the rate of change in the rate of change of growth... maybe you mean the second derivative of revenue? First derivative being growth (better be positive more often than not) and second derivative being change in growth (hopefully positive, but whatever).
Re: (Score:2)
Only in America would a company that has never turned a profit be considered "wildly successful."
There's another name for what Amazon has done (Score:3)
There's another name for what Amazon has done that the rest of the civilized world uses: "Pyramid Scam".
Instead of turning a profit selling products or services, they sell stock to pay off the existing stockholders. Then they sell more stock to pay off those shareholders.
The problem with pyramid scams is eventually you run out of potential shareholders to bilk, you still haven't turned a profit, the whole damned thing comes crashing down, and everybody loses their shirt except the guy at the top of th
Citation needed (Score:4, Informative)
Shares outstanding 2/18/2004: 404,330,593
Shares outstanding 1/22/2009: 428,583,135
Shares outstanding 1/17/2014: 459,264,535
Shares outstanding 10/17/2014: 463,006,452
The increases have virtually entirely been based on stock-based compensation to employees or stock issued as a method of acquiring other businesses. There have been no "stock sales to pay off existing shareholders".
Retained earnings at 9/30/2014: $1,735,000,000, i.e. inception to date they have accumulated more net income than net losses (albeit fairly thin compared to the sheer volume of revenue). They have indeed "turned a profit".
Meanwhile, they are fairly liquid depending on the time of year you look at them (they tend to be flush with cash right after Christmas, imagine that) and had added almost $5 billion in infrastructure between 12/2013 and 9/2014 alone, mostly with cash.
It's fine to hate on teh evil corporations but you should at least accuse them of things they actually do instead of things they don't (no pyramid schemes).
They got spanked. (Score:1)
Amazon's hardware sucks (Score:4, Insightful)
All of their hardware sucks. Largely because the software in their hardware sucks. They're using Android, fine, but it's a locked-down version of Android customized to exclusively use their own store (I believe you can get Google Play back, but it takes work). Which is them giving both the user and Google a big "fuck you."
And then they're trying to break into a saturated market with big name competitors. What's the killer feature? Where's the value added? What aspect sufficiently differentiates them from their competitors? The Amazon name isn't known for phones and won't carry the product. Their shaft of the customers by tying the phone to their own app store doesn't help. Their help system? Few enough people want to admit they need help, much less have the foresight to improve the experience. And Android is so easy to use, who really needs that much help anyway, especially help they can't get from say, their kids or their friends?
The rest of Amazon's hardware sucks too. They're copies of other products that might visually be nice, but lack usability sense. Google's USB fob can go anywhere. Amazon can only go where Amazon wants you to go. How can that even compete?
And then there's the other stuff that's not even worth mentioning. Like the speaker. What is that even for? Listening to music from Amazon only? Where's the direction? Where's the strategy? It's like they're throwing shit at the wall to see what sticks. Except said wall is the glass back of an elaborate toilet that also is a waterfall.
Actually, I know what it is. They had so much success with the Kindle, they had no idea what made the Kindle successful: they already had the dominant online book store and they were the first to market. Of course it would be successful. But they don't dominate anything else, and they're late to the game everywhere. How can they expect the same success?
What about Fire tablet? (Score:3)
I had thought the Fire tablet was actually getting OK uptake, in part because it could play Prime video.. not sure if Amazons video ventures will succeed long term (I still greatly prefer Netflix even though I have a Prime membership and can watch Prime video).
So in a way, it doesn't even matter that the hardware and software sucks, because the Fire tablets are meant to be consumption devices in a way the iPad never was. So the mistake was a Fire phone actually trying to offer function outside that special
Re: (Score:2)
They were not first to market with ebook readers.
But kindle WAS a very well executed product, perfect for reading books.
And their propriatary browser and server side caching technology is innovative.
Looks like you're making your argument by throwing stuff at the wall to see what sticks.
To me it just looks like the fire phone was just a bit too ambitious, and slightly missed the targeted market.
It is not the end of the world for the company. Maybe they will revise and try another phone launch, or abandon tha
Re: (Score:2)
So? Why shouldn't Amazon be allowed to create a walled garden? You make it seem like it's a right that all Android devices must be open and all that. Amazon wants to make their own walled
Seriously (Score:5, Insightful)
They risked a gamble, so what. Companies build products that fails - it's not even a headline. Amazon built something that people think is a failure, then everyone went to bed, woke up the next day and everyone moved on.
Re: (Score:3)
It would help... (Score:2, Interesting)
...if the Fire phone wasn't locked down to the point wherein you have to root it just to do things that don't directly involve Amazon.
Worst of all is the way that Amazon has wired this directly into their app store, and don't include the Play store. While the Play store is supposed to be available via an app you can install, I can see plenty of users being somewhat leery about installing that, and rightly so; most people aren't used to screwing with their phones the way they might be used to screwing with
VERY INACCURATE (Score:5, Interesting)
I was an an engineer in that team during the first incarnation of the project. The article is very very inaccurate.
- team was not scrapped by jeff, at least not until large number of people walked out due to mismanagement
- prototypes that worked (and were of phone size & shape) existed more than 2 years before launch but then (as mentioned) team walked and it all had to be scrapped
- hw team often undercut sw team by replacing components and not telling anyone about it
- hw team often made mistakes of the very basic variety (two separate sets of pull-ups on a single i2c bus)
- some parts choices were motivated by personal interests of people in the hw team, even against their own data & analyses. This was allowed to proceed
- some of the management made the team look very foolish in front of vendors (asking questions that made no sense in the current millennium)
- sw team was kept busy by endless meetings with no end in sight, which significantly cut into any chance of productivity
Re:VERY INACCURATE (Score:5, Funny)
For a moment there I thought you were talking about the last two companies I worked for. But neither had a CEO called Jeff.
Re: (Score:3, Insightful)
And all of this must have been very demoralizing and irritating for the people who worked on it, but at the end of the day: the only issue which matters for the Fire Phone was the Kindle Fire being a shitty tablet.
Without Google Play the Android operating system is worth less than Windows 8. I was dumb enough to buy a Kindle Fire. Fantastic device, aside from being totally useless. That's not a contradiction either: It's like a gorgeous car with no engine.
A smartphone does one thing: lets you install apps f
Re: (Score:3)
I'll take a wild stab in the dark here and guess that you possibly were in the software team? I wonder what a hw team members version of this would read like. Or that of a manager overseeing both teams.
Rashomon is a really good movie, apropos nothing in particulal.
Re: (Score:2, Interesting)
It is just the nature of a combined software / hardware solution that hardware teams tend to win. They have tangible manufacturing, costs and physical limitations that managers understand. While software has very different kinds of limitations -- often human limitations -- that managers don't understand. So if a hardware engineer wants to go with a different chip, he / she can provide a good explanation from a cost, space, supply, power usage and many other reasons. However a software engineer's reason to n
Re:VERY INACCURATE (Score:4, Interesting)
Basically so, yes. Although - and I say this as a software person - there's good reason for that to be the case. Hardware incurs per-unit costs, so any design change that makes it cheaper to build will be paid back million-fold. If that increases the cost/time of developing the software you have to show that increase is higher than all the money you save in manufacturing. Unless the hardware changes are truly extreme, that is unlikely to be the case with a volume consumer product. Software has no unit margin cost, so the same logic doesn't apply in reverse.
The Rashomon reference was not an idle one, by the way. No matter how honest and well-intentioned, you're unlikely to have an unbiased or particularly correct view of what happened if you were involved directly in something. It's great to hear the point of view - but that's what it is, a point of view. Other teams and people at other levels certainly have others, and it'd be foolhardy to try to understand what happened based on ony one or two of them.
Re: (Score:2)
Rashomon is a really good movie, apropos nothing in particulal.
Or apropos of everything. I guess it depends on your point of view.
Re: (Score:2)
Rashomon is a really good movie, apropos nothing in particulal.
That's not how I remember it!
Re: (Score:1)
- sw team was kept busy by endless meetings with no end in sight, which significantly cut into any chance of productivity
I worked at Amazon for many years (on two different teams, nothing to do with the phone) and I can attest to this being true. Endless meetings, status reports, on-call duty, interviewing new dev candidates. It was a huge drain on engineer productivity.
Re: (Score:3)
I wonder if the problem with the pullups is that one team measured them in inches and the offshore team measured them in centimeters?
(before you reply, yes, I'm kidding. I know perfectly well about pullups and i2c; but was just having a bit of fun, here. I'm too fat, myself, to do ANY pullups, these days, but that's for another thread, another day...)
Amazon is waiting for a competitor (Score:5, Interesting)
For instance I heard a rumour that Microsoft wanted to really take on Word Perfect. So they looked at WP's finances and realized that WP was not a lean company at all. Yet profit margins were really slim. So Microsoft didn't need to really go head to head with WP in all markets in a giant slug fest but that they only needed to reduce WP's revenue by 5% which would mean they would start taking losses. So MS found the easiest 5% to go for and took it with ease. Then with WP on the ropes MS was able to clean up the other 95%.
I also read that in the early days of MS getting into the C++ IDE world that they couldn't make any headway against Borland C++. So a new guy running the C++ project asked the marketing people what C++ programmers wanted; which turned out to be templates. But those were the elite of C++ programmers. So he re-asked the question to the typical C++ programmer and they said that they wanted to find an easy way to make Windows programs (windows was new and much programming was still in DOS at the time). So he released VisualStudio 1.0 which had easy wizards to get a windows program up and running and it was years before VS eventually got around to noodling with templates. But I remember the last version of Borland C++ that I used was all blah blah blah about their wonderful implementation of templates.
So I see Amazon as Borland C++ or Word Perfect 4.2. They are kings of their universe and there is no real competitor on the horizon. And then boom headshot and they were gone. I am certain that if you went to a tech conference 6 months before each of these two products died and suggested that in 2 years the products wouldn't basically be in use that people would have laughed you out of the room.
So at this point Amazon looks eternal and each of their many many mistakes seem to be tolerable. But I will give an example of a WP mistake. They were slightly worried about MS Windows and this crappy little word product. So they thought by dragging their feet with on Windows version that they stood a chance of actually killing windows entirely and keeping the world on DOS. I suspect that many seemingly smart executives nodded approvingly at this brilliant plan.
Re: (Score:1)
Alibaba is coming. Once Alibaba becomes mainstream Amazon as we know it will turn into the next Blackberry. The collapse will be sudden, swift, but(!) the man holding the strings will not let it go down the way BlackBerry did.
The chinese are here and their pricing models are terrifyingly competitive.
Re: (Score:3)
Let me rephrase that question.
And why do you think the Western man has a fundamentally different attitude towards counterfeit items than the rest of the world?
eBay also sold tons of counterfeit items.
craigslist sells tons of counterfeit items, as well as contraband.
The flooding of the market with counterfeits only has the effect that the pricing of the genuine items go down to compete against the ripoffs.
Western man has been buying cheap chinese products from Walmart for decades now, and if I am not much mi
Re: (Score:1)
Did it ever occur to you that this is precisely the strategy Amazon is using to destroy other businesses? That is, steal the most profitable customers? That leaves Amazon last man standing.
And how are you going to play the same game against Amazon? All the obvious ways requires _massive_ capital expenditures.
One remote possibility is that the culture shifts and all of a sudden Amazon's most profitable customers _don't_ prefer the convenience of home
The other alternative is Amazon grows to rely on low-end cu
Re:Amazon is waiting for X... (Score:2)
WalMart.
Re: (Score:2)
Things like their website might win "best retail website of 2006." Plus other oddities like their s
Re: (Score:2)
You should never be afraid of cannibalising your existing business; it will happen eventually and it's better done by yourself than some other bastard.
I'm sure Kodak's employees would agree. Both of them.
Re: (Score:2)
This has to be more highly rated. Amazon has its fingers in many pies, but in terms of putting physical products in your hands, Amazon is really facing off with Walmart. We've all read the crazy articles about Walmart's distribution network where suppliers have a ten minute slot to show up and unload their trucks into Walmart's warehouses. Well, this pretty much applies to their online sales as well.
Re: (Score:2)
Hand in your MBA card at the door (Score:2)
Sell for 5% less than the competitors and trouser the other 10.
Re: (Score:2)
Amazon has been successful because it has been diversifying into various revenue sources instead of relying on only online sales. Amazon makes money from: (1) Kindles and their content; (2) Amazon Web Services; (3) online advertising to the tune of hundreds of millions of dollars a year; and (4) selling on Amazon.
Amazon's misfires on the Fire tablet and phone are not the mistakes of a company that is trying to preserve a monopoly. It is a company trying to expand their revenue base and not succeeding at fir
Re: (Score:2)
I can say that at this point one American that I know will check Amazon first for pretty much every purchase. The question is can that be translated to another company or collection of companies? Amazon isn't like ebay in that ebay is a terrible auction site but they have all the people bidding which attracts all the products which attracts... So breaking into that market against ebay would be very hard. But alibaba.com s
Re: (Score:2)
Re: (Score:2)
And don't forget another success factor.
Don't expect a quick win. Just keep doing what you're doing and hope the other guy screws up and you don't.
Just wait for the top dog to miss a step.
That's how Sybase database died. They released a buggy version of their DB that caused a lot of data losses.
Instead of the enterprise scale DB market being a mostly 2 horse race, it became a 1 horse race with just Oracle(and a couple of also-rans).
With Web browsers, you could say netscape eventually killed itself. Eventua
Re: (Score:2)
Re: (Score:2)
Re: (Score:3)
Stock holders are forgiving to Apple because they constantly show profits. Even during the dot-com implosion, Apple continued to show growth and profits in their Mac lines as the rest of the PC industry struggled.
Amazon is the opposite. Amazon has never had a profitable quarter. Instead their spending always outstrips their revenue. Stock holders have been amazingly patient because Amazon has been doing this for like 20 years now. But a $170 million write-down is a lot of money (unless you are Microsoft, an
Re: (Score:2)
Revenue doesn't mean an awful lot when you're not paying dividends. Sure, it's a metric and you can play with price to earning ratios and whatnot but if you're not putting $$$ in peoples palms, the stock price is really what counts.
Re: (Score:2)
Amazon does not.
Re: (Score:3)
Apple's released duds and no one gives them any crap.
"No wireless. Less space than a nomad. Lame." The first-gen iPod that statement was written about was a bit of a dud. It wasn't until they added Windows compatibility a year or two later that it finally took off. G4 Cube? Utter and complete dud. Beautiful aesthetic, horribly overpriced, designed for a niche that simply didn't exist (i.e. professionals who were willing to trade expandability for good looks). Still talked about today as one of Apple's stupidest ideas. Even Apple's non-duds are given crap. The
Re: (Score:2)
Apple's released duds and no one gives them any crap.
Apple released the iPhone 5c, with only the iPhone 5s and maybe the Samsung Galaxy S4 selling more units - and everybody calls it a dud and gives them crap.
Amazon phone is the Apple/Google Frankenstein (Score:4, Insightful)
The Amazon phone takes something cool (Android) and locks it down Apple style. Apple can get away with it because they have perceived value in better quality hardware/design/vertical integration/app selection, etc. Amazon doesn't offer any of those benefits. So it ends up coming off as a cheap, locked down Android phone with crummy hardware and many of the good parts of Android missing. There are other cheap Android phones you can buy that offer more than the Amazon phone.
What Amazon needs to do is offer something the other guys can't offer. Give customers free shipping on anything they buy from Amazon using their phone. Or maybe a half price Amazon Prime deal for the duration of the 2 year contract. Make it possible to add Google Services without having to root the phone. Stuff like that.
Simply putting out yet another cheap Android phone is simply a race to the bottom. But a mostly stock Amazon branded Android phone with some cool Amazon services bundled in with it - now you're cooking with gas.
Re: (Score:3)
Amazon have offered it with 1 year of free Prime (that was back when they were also offering them at $200). I guess that's just a sign that they're not doing so well though. That was contract free also.
Re: (Score:3)
I think the Google services thing is a Google restriction. Though Amazon possibly could have got on board with that, it possibly would have locked them out from some of the things they wanted to do with the phone. Google services have really turned into an Apple style lock-down on Android unfortunately.
Re: (Score:2)
The fire phone is currently $189 for an unlocked phone and it includes a year of prime. That means free shipping for a year no matter what platform you order on as well as free video and music streaming for a year.
Re: (Score:2)
There are other cheap Android phones you can buy that offer more than the Amazon phone.
This is all it comes down to. People are going to pay high dollar for a weird 3rd party OS, hardware gimmicks, and lock-in unless the price is right. That's why the earlier cheap kindle tablets succeeded and the overpriced phone failed.
Article Misses the Central Point (Score:1)
The central point of the Fire Phone is for it to be a content-delivery device. The fact that it's a phone is only of passing interest. The goal is to get people into the Amazon digital media ecosystem so that they consume all their music, movies, etc. by downloading or streaming from Amazon. For $ per download/stream of course.
two issues Bezos is blind to (Score:2)
(1) it's a crap phone, and we've all got phones that make the Fire look like 1982.
(2) it's a pushback against "we will be your only store, your company store, and in fact we will put an agent in bed with you to make sure you never think of another supplier for anything."
Fire Phone (Score:2)
The wife likes hers. We did get it at the $200 discount price and she's already an Amazon Prime member though. I think I would find it troublesome
Fuck Wall Street "analysts" and journalists (Score:3)
Henry Blodget is a clown. What business does he have still being around and giving opinions after all he said and did in 1999? Why would we care what he and others of his ilk say about the future when they have been so spectacularly wrong where it counts? "We think Amazon is just one of many stocks for which this narrative will ultimately prove false." Keep thinking douchebags while people at Amazon create something new and useful.
I have long suspected that Business Insider is junk content-wise, and now seeing that Henry Blodget is its editor-in-chief I know for sure. If FastCompany takes it seriously, they are not any better. Forbes always smacked of empty, they had an article a couple years back about how Jobs was wrong for not introducing a tablet earlier, so it was clear they have nothing of value to offer either.
It's all essentially entertainment on the topic of finance with no substance behind it whatsoever. Like that guy Cramer that yells booya.
Re: (Score:2)
Keep thinking douchebags while people at Amazon create something new and useful.
OK, when will that start? You still can't fucking even sort items by price until you drill down to a specific category, what year is it?
Re: (Score:2)
OK, when will that start? You still can't fucking even sort items by price until you drill down to a specific category, what year is it?
Are you kidding? They made a revolution in buying, reading, and learning about books. AWS made a revolution in online services. The rest may be convenience -- buying things on Amazon prime (been a member for years), watching stuff with Fire TV (I own it), and their line of tablets (of which I have none), but it's still useful and they did it. (Yes their price sorting sucks.) Amazon made a big change in the world, and mostly for good. IMO. And what good have those analysts done? Well maybe you can say Henry
Re: (Score:2)
Except there's nothing new or useful about the fire phone
Re: (Score:2)
I have zero interest in the fire phone but that statement is not true: there is hardware and software engineering work done that make this product both new and useful, except not as much compared to market alternatives. But those engineers and designers and so on made the damn thing, unlike these idiot analysts who make nothing of value and give their opinion without having any skin in the game (or stand to make a profit in not-quite-not-yet-illegal ways -- there's a book called Conflicted by Michael Pulp w
Amazon does it the wrong way (Score:3)
--start rant--
Amazon is too aggressive in trying to bind customers to their ecosystem. Customers appreciate that much less than Amazon's managers might think. Case in point: Because Google for inexplicable reasons did not let me buy anything with my well-working Paypal account, I had to install Amazon's app store. Now that means you have to allow 3rd party apps so they can fully control your phone. Very insecure, but okay. Then I had to buy some 'Amazon coins" because any other payment method did not work, even though I customarily order books to my country from this account. Fine, I bought them and got the apps. But then I realized to my horror that Amazon injects code into them that only allows you to use the aps when you are currently logged into your Amazon account on the phone! Not only that, they also automatically activated the 1-click buy function!
Not only do these apps take an eternity to start now (boy, this log-in check must be complicated), if somebody grabs my phone he can now order anything with one click and has full access to my Amazon account! How crazy is that?
On the plus side, their customer service is top quality. The only thing they aren't allowed to tell you, but probably wish they could, is that you should not use Amazon's "app shop" under any circumstances ....
--end of rant--
UK launch was a disaster as well (Score:2)
Amazon made mistakes (Score:2)
1) They tried to locked down the Android environment ala Apple.
2) They failed to include an expandable SD memory slot. (Sure, you can have cloud, but that costs data.)
3) They failed to leverage their services. [Namely, expanded personal cloud access for cheap.]