Failure pattern · United States · 2014–2015
Amazon Fire Phone: a $170 million lesson
Amazon's Fire Phone featured 3D effects and a tool to identify products to buy, but cost as much as an iPhone. Sales were so weak that Amazon wrote down about $170 million within months.
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
by the numbers
- Launch price (on contract)
- $199
- Price after cut
- $0.99 on contract
- Write-down (October 2014)
- about $170 million
What happened
Amazon launched the Fire Phone in July 2014, exclusively with AT&T at $199 on contract. It had a ‘Dynamic Perspective’ 3D display effect and ‘Firefly’, which recognised products and media and linked them to Amazon's store.
Customers saw a phone designed more to help Amazon sell than to help them, with a limited app store and a premium price. Within weeks Amazon cut the price to 99 cents on contract.
In October 2014 Amazon took a write-down of about $170 million, largely for unsold inventory. The phone was discontinued in 2015. Lessons from the team helped Amazon succeed with Echo and Alexa.
Timeline
- 2014
Launch (July); price cut; write-down (October).
- 2015
Fire Phone discontinued.
what went wrong
- Product built around the company's interests.
- Premium pricing without premium value.
- Exclusive carrier deal limited reach.
the lesson
Products built to serve the seller rather than the customer struggle — even from a company famous for customer obsession.
Apply it to your business
- 1Check whether each feature helps the customer or just you.
- 2Price must match perceived value.
- 3Treat failures as learning that feeds the next product.
Laws at work in this story
Figures are rounded and drawn from public reports, company filings and widely cited coverage at the time. Check the company's latest filings before relying on any number.