The Wall Street Journal That reports Amazon has laid off “dozens” of engineers in Lab126, home to its hardware division, scaling back current offerings and abandoning some future projects. It’s understandable, because many of Amazon’s hardware products lack wide appeal. It’s also a shame, because nearly all of them would have it if Amazon focused more on Consumers, and less on consuming.
Amazon has not confirmed the report, and declined our request for comment. What’s Certain at the very least, though, Is That The company’s Fire Phone, Which debuted last year is a critical panning and consumer shrugs, has run its course. After a recent slate of, er, fire sales, Which brought the effective price of the smartphone (after an included year of Amazon Prime and other extras) as low as $ 10 (yes, 10 bucks), it’s out of stock and unlikely it return. It also Appears to have been removed from a letter of a Lab126 VP of Product Development Paul Gojenola’s Responsibilities as of June, per his LinkedIn profile.
The Fire Phone May be Amazon’s most high-profile hardware flop shoe The core Reasons for its failure apply across many of the company’s products. Simply put, the Amazon produces hardware that’s designed to help Amazon sell things, often at the detriment of the overall user experience. And while all devices are ultimately and Means is an end, the question is: Whose?
Fire’s Out
Plenty was written about what the Fire Phone got wrong when it was released, but it might be even more helpful is unpack what it got right. Or rather, what almost got it right.
“And like many of the Ideas That they were proposing on the device itself,” says Gartner analyst Tuong Nguyen. “Ideas dry as using visual identification is IDENTIFY and buy things, that’s something I want to see more of in the future across a range of devices.”
The Fire Phone’s visual acumen was incredibly impressive. There’s something magical about a phone That knows what’s going on in the world around it, that can tell different flavored bags of Popchips apart. So clever, dry engineering acumen! And yet there’s also something so reductive That magic about using this convert sales for Amazon.com. As Tim Moynihan put it in WIRED’s review from June of last year: “In the world of [Fire Phone], everything around you exists to be bought on Amazon.” What a depressing thought.
More damning for Fire Phone, though, Is That look-and-buy turns out not to be a compelling PARTICULARLY marquee feature. Those same smarts are available on the iOS and Android as well through an app called Flow. Flow has fewer than 100,000 Android installs, According To its listing on the Google Play Store. Amazon Prime Now, publicly Announced just this week, has already garnered over 500,000. Amazon Kindle? Over 100 million.
Another Factor That should have worked in Fire Phone’s favor was its price. Amazon has built a reputation on affordability, and once you read the fine print, its smartphone was no different; an included year of Amazon Prime Essentially it made $ 100 on-contract for a 32GB handset. You had to dig, though, that realize the full value; The phone was listed as $ 200, which was the only number most people saw.
“They priced it like an iPhone,” says 451 Research VP Kevin Burden. “They priced it at a premium level phone, Which makes people think it should perform like an iPhone, and people who buy it should expect it to be the same type of status symbol as an iPhone. That certainly was not the case. “
Besides Which, even the” discount “was not entirely selfless. It seems likely That the Amazon Prime memberships expected to pay for themselves in the long run. A January report (.pdf) from Consumer Intelligence Research Partners, indicates That Prime members spend $ 875 more per person per year than non-Prime Amazon shoppers.
A smartphone’s success or failure hinges on one central question, says Nguyen: “What can this device to for me that my current device can not do already? And does it do it so much better that I’m willing to drop the device I have now and get it Immediately? “
Fire Phone inarguably let you buy things from Amazon faster than you current device can. Clearly, that was not enough to get people to drop Their devices. Which is telling, and unfortunate, because that’s also what drives the bulk of Amazon’s hardware lineup.
Amazon’s Prime Target
Look at any device in Amazon’s expanding arsenal, and you’ll see an array of products Directly That all point back to the Amazon shopping carts, with varying degrees of window dressing. The range can be best illustrated by two of the most recent releases. Echo, and voice-activated Bluetooth Primarily serves up music, news and sports updates, and answers a trivia questions, but can also be used to add to shopping lists or to order items. At the other end of the spectrum lurks the Dash Button, Which has the salts function of requesting the Amazon deliveries of specific items with a single tap.
Those extremes bookend a mushy middle of ebook readers, tablets, and a set-top boxes, each of Which share plenty of DNA with the Fire Phone: They Provide solid hardware, reasonable pricing, and direct windows into Amazon’s near-infinite storefront. These are all good things-or at least, not Inherently bad things. People like to shop, after all, and taking the friction out of That process benefits everyone Involved.
Amazon was hoping That Consumers would look at its hardware and say, ‘This is going to be a better way to consume Amazon services, I’m going to be able to buy things a lot easier on These pieces of hardware. ‘
This works PARTICULARLY well on Amazon’s original hardware effort, the Kindle , in part because it benefits from both a singular focus and a streamlined interface.
“The Kindle’s a very basic, straightforward device,” Explains Nguyen. “Oh, you like to read books? Here’s something that’s thin, light, that lasts almost forever, and it’s easy to use. That’s the appeal there … It serves its purpose very, very well, at a very reasonable price point. “
Even the Kindle, though, suffers from Amazon’s closed, retail-focused system. When Amazon gets into its seemingly regular spats with the publishers, the Kindle ebooks have faced either inflated prices or lack of availability. Like its only real rival, Kobo, the Kindle uses DRM on the titles you buy Directly. Unlike the Kobo, Amazon substantially limits the number of file formats compatible with its devices.
Kindle Fire tablets work well and are significantly cheaper than the iPad, but they too are built around the premise that you ‘want to buy Amazon products and use Amazon services.
“Amazon saw the Kindle Fire as a piece of hardware that could accommodate deliver a direct portal into its services,” says Burden. “That’s what Amazon got out of it. So let’s deliver this tablet at a price point that could accommodate make people say ‘I do not feel like spending this much money for an iPad, let’s see how this Kindle Fire works.’ “
Again, there’s nothing wrong with this; many companies create products That ultimately point back to themselves. Apple wants you to use iTunes and the App Store; Google wants you to use its services, but honestly just the Internet in general will suffice. The difference, though, Is That dedicated hardware Amazon does not make buying from Amazon that much easier; it just makes the opportunities more obvious.
“I think we can say That Consumers are a little bit too smart,” says Burden. “Amazon was hoping That Consumers would look at its hardware and say ‘This is going to be a better way to consume Amazon services, I’m going to be able to buy things a lot easier on These pieces of hardware.” When the reality you bridge Consumers are smart enough to realize That regular hardware-Whether a PC, a laptop and an iPhone, or an Android phone, it was just as easy. “
Amazon’s Fire devices (both phone and tablet ) also come with plenty of trade-offs for that price and supposed shopping convenience, Including a user interface that’s at times inconsistent, and no ready access to Google apps and services.
The company’s Fire TV set-top box, meanwhile, offers a healthy array of apps and gaming but prioritizes Amazon Instant Video in its innovative voice search. As Recode and others have found, selections That might be free elsewhere are buried in favor of a paid Amazon version, while as recently as April, it did not return results for Netflix at all.
All of Which brings us back to Nguyen’s benchmark for success: What does the device do that mine can not do already? And how much better can it do it?
“The big question Becomes, Amazon should really be in the hardware business at all?” Asks Burden. “Or should they focus more on good experiences on mobile devices in general, not Necessarily dedicated hardware? There’s probably a case to be made around that. “
Burden points include Microsoft, Which intends to make its Cortana Virtual Assistant available on both Android and iOS devices, rather than a Windows exclusive, because it values having Consumers using its backend services squeaking out above most amazing Slim hardware margins. Nguyen also questions Whether the Amazon truly wants to be a “box maker” rather than just driving people to its core business, however it can.
But Amazon already has perhaps the strongest cross-platform presence of any tech company right now; it’s unclear what pushing even further Top into iOS and Android would entail, or how much it could push further Top. And while it small Do not ever be a box maker, it’s demonstrably capable of making pace-setting devices, like the Kindle, and taking an innovative (and, at least in my house, the most amazing indispensable) leaps, like the Echo.
So perhaps it’s better to read what Appears to be a Fire Phone retreat as a hopeful sign That That Amazon recognizes its devices need to be more than just storefronts, and That gimmicks do not play nearly as well as usability. The Wall Street Journal report goes on to say Lab126 That still has plenty in the works, Including a kitchen That computer doubles as a smart home hub. In fact, it sounds a lot like the Echo, with a more traditional user interface. If so, I can not wait to try it.
It’s also apparently responsive to voice commands, Which the Wall Street Journal helpfully Explains could be used for “tasks like ordering merchandise from Amazon.com “
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