With the Fire smartphone, however, Amazon may finally have bit off more than it could chew. Rumored for a couple of years, the phone running on Google’s Android operating system made its debut last summer at $199. But it flopped in the marketplace and soon was available for just $1 with a two-year AT&T contract. Amazon took a $170-million third-quarter charge on inventory commitments, largely due to dismal sales of Fire.
Critics such as Wired.com said that the phone was “overpriced for what it offered” and “failed to deliver” what customers want: quality apps on quality hardware.
“Amazon is going [in] too many different directions,” Kevin Paul Scott, co-founder of ADDO Worldwide and author of the book, 8 Essential Exchanges, told CEO Briefing. “It is coming across as a master of none rather than the master of all” and could cause Amazon big problems in the future.
So far, Bezos has managed to advance and hold together one of the world’s great new companies even as he has spread Amazon into more and more businesses. It’ll be interesting to see if the Fire smartphone proves to be anomalous to that record of success—or the first sign that the CEO needs to rein in his goals.