test: Amazon FIRE Phone – We wish it Well – But its likely Dead on Arrival – We Give it 5 Arrows Down ⬇️⬇️⬇️⬇️⬇️

★Amazon Fire Phone. Amazon recently announced its first smartphone, the Fire Phone, a highly anticipated device, that has been “in the making” for years. The Fire Phone represents Amazon’s continued push to fabricate and sell hardware. Apparently Amazon’s hardware strategy has changed, as the Fire Phone is priced similarly to premium smartphones like Apple’s highly successful iPhone 5s, which is selling at an annual pace of 200 million iPhones.

★ The Question remains and only “time will tell….” will Amazon maintain its price and sell the new Fire Phone for a reasonable 25% profit, or will Amazon again be forced to sell their new hardware for a loss to maintain some marginal market-share.

★ Amazon’s Fire Phone smartphone is in stark contrast to the bargain-basement, loss-leader pricing of Amazon’s Kindle Fire tablets, which Amazon has been selling at a loss for years in effort to: (1) maintain only a single digit market-share, and (2) sell its eBooks and Amazon.com products. This raises some serious questions about the success of Amazon’s hardware strategy. One would reasonably ask… Why continue to fabricate and sell hardware at losses?

★ Well then, WHY is Jeff Bezos forcing this new hardware. Amazon is Not making money selling its the Kindle Fire tablets but has managed to win a “decent level of market-share” of the worldwide tablet market.

★ During the fourth quarter of 2013, Amazon came in third place, behind Apple and Samsung, with a 7.6% market share (likely because Kindle is selling at a loss), moving about 5.8 million units during the previous quarter. IMHO, market-share achieved by selling a product at continued losses, with little hope of ever selling the Kindle Fire for a reasonable profit margin, is CEO insanity.

★ Why bother attempting to compete, by selling the Kindle Fire at losses, quarter after quarter, year after year. Negative is negative and sooner or later Amazon must give up their loss-leader strategy, particularly when the entire AMAZON.com enterprise is operating at marginally above ZERO profits, for years. AMZN shares are trading at over 400x earnings at $325/share, Wow, this defines intoxicating, exuberant enthusiasm, LOL, (this time, lol means lots of luck).

★ Apple on the other hand has made continued profits selling its iPads from the very first month of iPad sales in April, 2010 through to today, and selling iPads at an annual pace of 60 million units, and 230,000,000 in the users hands.

★ Kindle’s low price, below fabrication cost, Amazon’s Kindle tablets are a big factor in its market-share achievement. However, the low prices are so low, Amazon is loosing from 5% to 15% with each unit sold. Amazon’s strategy… has been to sell the hardware below cost, or near cost, in an effort to get their Kindle Fire tablet-buyers to purchase more eBooks and other retail products on Amazon.com

★ With a history of terrible multi-year loss-leader experience, with Amazon’s Kindle Fire Tablets, Why is Amazon taking the financial risk of bringing a smartphone to market? As Amazon’s Fire Phone is priced in line with Apple’s iPhone 5S and Samsung’s Galaxy S5, it’s unlikely that Amazon’s plan is to use the Fire Phone to spur shopping at Amazon.com

★ Amazon is giving away a free year of Prime to people who buy their Fire Phone smartphone. Perhaps Amazon is targeting existing Prime members, but since you can buy Amazon products from any smartphone, and Amazon’s Firefly (featured button) on the Fire Phone, is little more than a glorified price-scanner, the Fire Phone seems like a likely tough sell.

★ Have You noticed. I have not regurgitated all Fire Phone specifications and comparisons, and given thumbs up / thumbs down, line-by-line. The reason, Amazon’s Fire Phone does not represent any significant advancement in SmartPhone technology nor operability, and barely “keeps up” with the two smartphone’s its competing with not to mention that iPhone 6 is about to release, in 74 days, with another generation of imaginative improvements…

★ IMHO, Amazon’s Fire Phone will be a Huge Failure. There will not be millions standing on Line at 5am at AT&T retail locations for this smartphone later in July. OH, did I mention the Apple EcoSphere, the platform, its stability, reliability, safety, and the 1,250,000 transformative Apps that magnify the usability of all 500,000,000 iPhones globally.

★ Amazon is getting distracted, IMHO which threatens its core business, which is also not operating well. There’s no question that Amazon has been wildly successful from a “Volume” standpoint, (not on a profits standpoint) as an online retailer, but Amazon has no advantages when it comes to hardware.

★ Amazon appears to be suffering from “DiWorsification” This is a “term” coined by legendary investor Peter Lynch to describe a company that diversifies into markets where it has no advantages, causing the company to suffer with more pain. Amazon may think it has the “Midas Touch” but it doesn’t. It’s a huge Retailer trying to be something that it’s not, because it continues to not break-out of either zero profits or near zero profitability; that’s a story that generally never ends well, yet its shares trade at over 400x earnings for years.

★ Fire Phone is not a threat to Apple or Samsung. For the same price as the Fire Phone, you can get a device made by a company whose business is to make compelling devices. Apple’s iPhone comes with the vast Apple ecosystem, and Samsung’s Galaxy smart phones have all that Google has to offer. But, although Amazon’s Fire Phone runs a fork of Android, it’s missing Google Play and all of Google’s popular apps, leaving it hobbled compared to the competition.

★ Is Fire Phone a threat to Apple or Samsung? In the interest of Fairness, when Apple announced the very first iPhone mid-year 2007, ALL the critics were as negatively enthusiastic as I verbalized above.

★ Recall in 2007 there was already a crowded field of SmartPhones offered by the then best technology companies. Personally, I entered Mobile-Cellular in 1985, with Motorola’s Dyna T-A-C 8500XL, a/k/a the “Brick” at a price tag of $3500 plus another $600 for the Car Kit. At the time this was the best available, where Motorola was a leader in producing very high quality Military grade communications equipment.

★ Looking at the image below, Samsung, one of the industry leaders in 2007 offered many models to choose from among 12 other vendors. As Apple announced their entry into the mobile phone arena, all the critics were questioning why Apple would waste their time entering an already crowed field.

★ Looking further at the comparison of Apple’s iPhone, its design was quite unique, with the entire face of the phone being touch-screen. Notice the Graphic of the 2007 iPhone used in TV and Print media at the new iPhone was unveiled. Obviously, the critics and naysayers were terribly wrong, as today the iPhone is in the hands of 500,000,000 users globally, where the iPhone is used by about 54% of the USA market, in a very crowded field of vendors.

★ Amazon’s Jeff Bezos, CEO of Amazon.com has been very successful in creating the Nation’s Largest Internet Retail enterprise. Here is a brief biography.

★ Amazon’s Jeff Bezos has been very successful as a “promoter” in convincing Wall Street of Amazon’s Magic, that Buying AMZN stock at $350/share is prudent when it earns 60¢/share, and in the process Jeff has created a $30 Billion net worth for himself, with a company does not make profits of any significance.

★ Jeffrey Preston “Jeff” Bezos, born January 12, 1964, is an American business magnate and investor. He is a technology entrepreneur who has played a key role in the growth of e-commerce as the founder and CEO of Amazon.com, an online merchant of books and later of a wide variety of products. Under his guidance, Amazon.com became the largest retailer on the World Wide Web and a top model for Internet sales. In 2013, Bezos purchased The Washington Post newspaper.

★ Bezos often showed intense scientific interests. He rigged an electric alarm to keep his younger siblings out of his room. The family moved to Miami, Florida, where he attended Miami Palmetto Senior High School. While in high school, he attended the Student Science Training Program at the University of Florida, receiving a Silver Knight Award in 1982. He was high school valedictorian.

★ Bezos attended Princeton University, intending to study physics, but soon returned to his love of computers and graduated summa cum laude, with a Bachelor of Science in Engineering in electrical engineering and computer science. While at Princeton, he was elected to the honor societies Phi Beta Kappa and Tau Beta Pi. He also served as the President of the Princeton chapter of the Students for the Exploration and Development of Space.

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