Why Amazon’s Fire Phone Is Dead on Arrival

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Amazon CEO Jeff Bezos ascended a Seattle stage yesterday to unveil the Fire Phone, his company’s first smartphone.

The 4.7-inch device includes a variety of next-generation features, from streamlined integration with Amazon’s various cloud services to live tech support via the “Mayday” button. It runs Fire OS 3.5.0, Amazon’s mobile operating system based on Google Android, and can access the thousands of apps available via Amazon’s App Store. But make no mistake: Amazon didn’t set out to make a vanilla smartphone. As with the company’s Kindle Fire tablets, the Fire Phone exists most of all to sell more products via Amazon’s online store.

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At the heart of that strategy is the phone’s Firefly feature, which the user can activate via a button on the side of the device. Firefly leverages the phone’s cameras and sensors to recognize objects in the environment, determine whether they’re available in one of Amazon’s stores and offer them up for sale via a simplified interface. See an interesting book on someone’s shelf? Firefly will serve up a sales link. Overhearing a cool song while at a restaurant? Firefly can identify music, too, and allow you to download albums to your device.

If Amazon had paired innovative features with an equally inventive pricing scheme, the Fire Phone might have presented a true challenge to Samsung, Apple and Google. But the “basic” 32GB version of the device costs $199 with a two-year contract (exclusively via AT&T) or $649 unlocked. The price point, which matches that of other high-end smartphones on the market, came as something of a surprise to many, considering Amazon’s devotion to selling products for as little as humanly possible; Its Kindle Fire tablets, for instance, have always competed on the basis of lower cost than competitors. Amazon is making a very big bet that the Fire Phone’s new features will attract those customers who would otherwise have chosen an iPhone, Galaxy S, or whatever premium Android device is scoring good reviews this month.

Those new features, simply put, might not be enough. Sure, Amazon fanatics—and there are more than a few—could flock to the phone, anxious to make their connection with the online monolith even more seamless. Those who primarily use their phones as cameras might likewise enjoy the Fire Phone’s powerful camera, not to mention the option to upload an unlimited number of photos to Amazon’s cloud storage. And anyone with an Amazon Prime account ($99 per year) can use the Fire Phone as a streaming-media hub.

But businesses—a key demographic for any smartphone—don’t care about any of those attributes, and certainly won’t pay a premium for them. For those already locked into the Android or iOS ecosystems, the prospect of a $199, Amazon-centric device on a single carrier doesn’t seem the most tantalizing. If Amazon had offered the Fire Phone for free with a Prime subscription, or focused instead on producing an ultra-cheap phone with cutting-edge features, it might have stood a chance of making an instant splash in a crowded market; but as it stands, the company could find itself fighting hard for significant adoption.

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