As Amazon continues to feed it Fire Phone with updates, a new report says the e-commerce company is learning from the short comings of its first entry into the smartphone market and is preparing to a second generation of Fire OS phone in 2016.
The second generation of the Fire Phone has already been in the works. But development of the Amazon's iteration on its first smartphone has been slowed, as the e-commerce company works to learn what it can from sales that were below investor and analyst expectations, sources told Venture Beat.
In the report, the sources indicated that Amazon CEO Jeff Bezos still believes his company can find success in the smartphone market. The original Fire phone's struggles have sent Amazon "back to the drawing board," one of the sources stated.
Released back in July of 2014, the Fire Phone was priced and presented as challenger to the iPhone and Galaxy series. The Fire Phone was first priced at $200 with a two year contract, but slow sales prompted Amazon to slice $199 off of the price - right now, the $449 phone back on sale for $.99 on contract and $229 unlocked.
Back in October of 2014, David Limp, Amazon's senior vice president of devices, admitted that his company had priced the phone incorrectly.
"We didn't get the price right," Limp stated in October. "I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we're also willing to say, 'we missed.' And so we corrected."
Limp's lament of the Fire Phone's pricing came after Amazon revealed that the smartphone first quarter on the market was dismal. Amazon was charged back $170 million for unsold Fire Phones, dampening otherwise strong sales for the quarter.
Despite the Fire Phone's struggles, Bezos said his company will continue to support the device and indicated that Amazon wasn't done making moves in the smartphone market. Companies have to continue to experiment and take risks in order to continue growing, stated Bezos at Business Insider's Ignition conference in New York City on Dec. 16.
"People love to focus on things that aren't working," stated Bezos in a recent interview. "That's fine, but it's incredibly hard to get people to take bold bets. And if you push people to take bold bets, there will be experiments ... that don't work."
Recently, Amazon made good on its promise to continue supporting the Fire Phone. The e-commerce company just rolled out a hefty package of updates for the smartphones, improving software such as Firefly and the camera app.
