Analyst: Amazon's Fire Phone Simply 'Not Compelling Enough'

Making less of an impact than Amazon hoped, the company dropped the price of the Fire Phone from $199 to 99 cents.

learn more about Nina Zipkin

By Nina Zipkin • Sep 9, 2014

Updated 4:00 pm ET

Amazon unveiled its Fire Phone with much fanfare in June, but after only two months on the market, the company has dropped the price of the $199 32-gigabyte model to 99 cents, with a two-year contract. The 64-gigabyte version, originally priced at $299 is now $99, according to a release from Amazon.

Customers who bought phone at the initial price can speak with customer service if they are interested in a rebate, and those who purchase the phone now can still get a free 12-month Amazon Prime membership, though for a limited time. The announcement comes amid anticipation of Apple's latest big event and hype around the iPhone 6.

Related: Amazon Drops $970 Million on Game-Streaming Service Twitch

Of the price slashing, Tuong Huy Nguyen, a principal research analyst at Gartner told Entrepreneur.com that "any kind of fire sale is meant to generate volume." The promotion seems to be working for the moment. The 32G Fire Phone is currently number one on Amazon's list of bestselling contract phones, while it previously was behind the Samsung Galaxy S5, though on the site's most "wished for" list, it sits at no. 18 spot.

Nguyen thinks that while the phone was a "solid offering" in terms of hardware, he believes that it had trouble gaining traction with customers because ultimately, "given the already high rate of smartphone ownership in the U.S., consumers need an extremely compelling [reason to buy]. The features of the device were not compelling enough to do this." Additionally, the phone's Android platform meant that the apps consumers can use are "essentially a subset of what's already available to Google Play users."

Related: By 2017, the App Market Will Be a $77 Billion Industry (Infographic)

However, even though the Fire Phone hasn't made as strong a showing as Amazon may have hoped, Nguyen foresees the potential of some of the innovations that came out the phone's four-year development, such as the interface's Dynamic perspective and features like the content recognizing app Firefly. "I still hope to see these types of functionalities integrated into the broader market [and] other devices across all vendors," he says.

Related: 9 Things Small Businesses Should Know About Amazon's New Mobile Payments Reader

Nina Zipkin

Entrepreneur Staff

Staff Writer. Covers leadership, media, technology and culture.

Nina Zipkin is a staff writer at Entrepreneur.com. She frequently covers leadership, media, tech, startups, culture and workplace trends.

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Business News

Frontier Airlines Just Announced Its All-You-Can-Fly Summer Pass for $399. What's the Catch?

As travel begins to pick up, the airline hopes unlimited travel will jumpstart its business.

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.

Business News

Mark Cuban's Grocery Store Hack Will Help You Score Cheaper Produce

The billionaire talked about his early days in Dallas when he was strapped for cash.

Growing a Business

The Success of Your PR Campaign Depends on These 3 Essential Elements

A successful PR campaign requires these three critical ingredients to ensure you're on the right path to success.