Amazon’s incorrect pricing give rise to a numbing $544m operating loss

The expression “you win some, you lose some,” best describes Amazon and its unsold Fire Phones which allegedly worth a whopping $83M no thanks to the lapses on the part of the retailer.

Amazon’s senior Vice President of devices David Limp had said to Fortune that the company failed in coming up with the appropriate price and added that it fell short on the expectations of the would be buyers. Thinking that the company had nailed the right price, it still need to make the necessary adjustment.

This blunder dealt a great blow to the company which had earlier success with its earlier model of Fire Tablets which were released few months ago and have received warm welcome from online buyers.

Limp said that the company is still on its learning curve and will keep on refining the software features of their products to make it more enticing in the market. Further than this they’ll leave the verdict on the part of the consumers.

Amazon has originally fetched the price of the 32 GB variant of Fire Phone at $199 on contract then reduced it to 99 cents, a strategy that has considerably bolstered sales.

Amazon had disclosed that it already absorbed a numbing $544M operating loss, $170M of which came from charges linked to releasing the new fangled mobile device.

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Comments

  1. Van says

    It’s not just the price… It’s also requiring a 2-year contract and only through AT&T. With that requirement, I’m not interested in it even at 99 cents.

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