Amazon Kicking Fire Phone to the Curb

The recent firing of "dozens" of engineers at Amazon's Lab126 research and development facility in San Francisco may indicate the company is rethinking its strategy on in-house consumer electronics projects. One product most likely on its way out is Amazon's Fire Phone, which has struggled since its launch over a year ago.

Citing "people familiar with the matter," the Wall Street Journal on Wednesday reported that Amazon has over the past few weeks "dismissed dozens of engineers who worked on its Fire Phone." Those firings were Lab126's first since the facility began operations 11 years ago, the report added.

Despite some positive reviews when it first came out in July, the Fire Phone has failed to win over a significant part of the smartphone buying market. Introduced at $449.00 -- though marked down a few months later -- the device, based on a fork of the Android mobile operating system, was criticized for the proprietary nature of its Amazon-centric apps.

'Single-Purpose' Nature an Obstacle

The developments at Amazon weren't surprising given such factors, William Stofega, program director for mobile device technology and trends at the analyst firm IDC, told us. However, Amazon's decision also reflects the highly competitive nature of the smartphone business, he said.

"The smartphone business is not an easy business," Stofega said, adding that while Amazon is "a large company that can make margins, it's still a tough business."

Amazon might have had the right idea with the Fire Phone, but "maybe it was not the right time," he said. The "single-purpose" nature of many of the device's apps also created an obstacle, he said.

"You have to have the apps that people are interested in," Stofega said, pointing to the earlier failure of the HTC First, which was commonly known as the "Facebook Phone" based on an interface...

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