Will A 99 Cent Amazon Fire Phone Make You Forget The iPhone 6? Probably Not!

September 10, 2014  |  

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With the iPhone 6 hitting the market, Amazon might have a lot more worries about its struggling smartphone, the Amazon Fire. So Amazon has moved fast and cut the price to 99 cents.

There was tons of initial buzz about Amazon’s first smartphone with 60,000 people attempting to get into the unveiling of the smartphone in late June, sales haven’t matched the enthusiasm.

Now to try and boost sales, Amazon is charging just 99 cents for the phone, if users signed a two-year contract with the exclusive carrier AT&T. This is an incredible discount of nearly $200. Amazon also said earlier buyers can apply for a refund from customer service. An AT&T spokesman, however, said it has a 14-day return policy, so people who purchased directly from the carrier in the first month can’t get the refund.

Buyers of the phone will still get a year of free Prime, Amazon’s shipping and video club, which usually costs $99, reports The New York Times.

According to IHS Technology, the Fire costs just over $200 to make. But when you add in the cost of the intellectual property, essential patents and the year of Amazon Prime, and it rises to around $400. Of course, it is even more when you consider all the cash spent on promotion.

The Fire was released in late July after four years of development. And prior to its release, analysts predicted sales of one million to two million units in the first year. And even though these numbers are low in comparison to other smartphone sales–Apple for example sales more than this every week–the Fire still won’t reach these expectations.

Digging deep into its pockets has hurt the online retailer, which says it expects to lose more than $800 million this quarter. Amazon recently secured a $2 billion credit line from Bank of America.

While Amazon does not release sales numbers for its devices, after 20 days, Amazon Fire phone users generated close to 0.02 percent of North American smartphone Web traffic, according to analytics firm Chitika Insights, but then flatlined. The Galaxy phone produced 17 times more traffic than that.

Unfortunately, the phone has been plagued by bad reviews, even though it does offer a few different things than other smartphones like the Dynamic Perspective feature, which enhances maps, shopping and games, and Firefly, which identifies products, making it easy for users to order them from Amazon.

Yet customers didn’t like the phone’s short battery life and a tendency to overheat. And, as one reviewer complained: “If you use this phone, you are inviting Amazon to know all the details of your life.”

The Fire got one star from a quarter of the reviewers, which Amazon says is equal to “I hate it.”

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