Talk about your fire sale. Amazon on Monday (Sept. 8) slashed the price of its 32-GByte Fire smartphone from to 99 cents—barely two months after launching it at $199. The requirement to have a 2-year AT&T contract remained.
The Wall Street Journal said that the move is “suggesting sales may be sluggish,” which is putting it mildly. Amazon also cut the price of its 64-GByte version by two-thirds, dropping it from $299 to $99. For consumers who think that they can really walk into a store, sign that contract and hand over one buck and get a penny back, think again. In some states—including California, Massachusetts and Nevada—sales tax will be based on the full price of the phone. Given that the 32-Gbyte version has a full price of $449, Nevada shoppers, for example, would pay $29.19 sales tax on that supposedly 99-cent purchase.
Amazon’s statement opened with a laundry list of benefits—included in what may be the longest run-on sentence in current American media relations history—before it even mentioned the pricecut. “Dynamic Perspective, Firefly, world-class customer support with Mayday, free unlimited cloud storage for photos, 32GB of storage—and, for a limited time, customers get 12 months of Prime membership with Fire phone, which includes unlimited streaming of tens of thousands of movies and TV episodes from Prime Instant Video, access to over a million songs to download or stream from Prime Music, over 500,000 books to borrow from Kindle Owners’ Lending Library and free two-day shipping on tens of millions of items,” said the statement’s first line before adding ” Now there’s another great reason to buy Fire—it’s just 99 cents with a two-year contract.”
The pricecut was announced the day before Apple’s planned rollout of new iPhones. It’s sales weren’t helped by less than enthusiastic reviews of the product. “The Fire phone got mixed reviews, with some critics saying the holographic screen and product-recognition software didn’t elevate it above competitors’ devices,” the Journal reported. “Amazon first began selling the Fire phone in stores in late July. It was expected to sell between 2 million and 3 million phones in the U.S. through the end of this year, according to J.P. Morgan analyst Doug Anmuth. Apple, by comparison, sold an average 2.7 million iPhones a week in its most recent quarter, a global figure.”