Amazon Exits the Phone Business

Posted on August 27, 2015 by Paul Thurrott in Mobile with 0 Comments

Amazon Exits the Phone Business

This one should put Windows phone in a bit of perspective: just one year after it launched its ill-fated Fire phone, Amazon has shut down all phone development and will focus that part of the company on tablets and other hardware projects instead.

That the Amazon Fire phone is horrible is obvious to anyone who’s seen one. After waiting on Amazon to provide me with a review unit last summer, I purchased the device during a, ahem, fire sale, and promptly determined I could never review it: its most-touted features—a goofy 3D capability and facial recognition cameras arrayed around the front of the devices—were indeed just gimmicks. The phone is terrible.

According to the Wall Street Journal report that broke this news, Amazon is doing the following:

Canceling a planned scaled-down Fire phone. This one actually happened previously, though the timeline is unclear. Not that it matters now, because…

Further phone development has been shelved. Amazon informed the team that made Fire phone earlier this year that its smart phone efforts have ended. The people left in this group are now working under a different executive. As a result of this change, a top Fire phone engineer left to work for Google, it is assumed.

Laying off the team that made Fire phone. Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter, the WSJ reports.

Taking a massive write-off. Last October, Amazon took a $170 million charge mostly to write down unsold inventory.

Scaling back some of its more ambitious personal technology projects. Amazon has scaled back or halted some of its more ambitious projects and has reorganized the division that makes these devices. Now, there is just one hardware unit, not two (tablet and e-readers, and the phone unit) as before. Among the casualties: Nitro (a smart stylus which translates a users’ scribblings into digital shopping lists), Shimmer (a personal projector), and Cairo (a tablet with a 14-inch screen).

Continuing with some projects. Amazon is still pushing forward with some personal technology hardware, including new projects such as a high-end computer for the kitchen that is code-named Kabinet and a tablet with a 3D interface that doesn’t require special glasses. They are also working to improve Kindle battery life to two years (up from six weeks).

Amazon isn’t the only company that can’t compete in this market, of course. You could go back to WebOS and work your way through Nokia, Blackberry, and many others if you wanted. But Amazon is perhaps unique in that their offering was patently terrible. The Fire phone won’t be missed.

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