Amazon Reports Financials, Fire Phone goes down in Flames
Amazon's smartphone is fired: Amazon introduced their new Fire Phone back in early July with a lot of hope. They introduced a very cool set of 3D home screens to choose from, 3D mapping, a neat new app called Firefly (a sort of an all-purpose Shazam) and Mayday which is free phone service to educate users on Fire features. But in the end it was too expensive and just another Android phone. With Apple's iPhone 6 mania sweeping the globe, Amazon's Fire smartphone is only going to fall further during the holiday quarter. Today Amazon had to admit to a massive write-down for their Phone.
Amazon said in a conference call following the release of a disappointing third-quarter financial report that it would take a $170 million charge primarily related to Fire phone inventory valuation and supplier commitment costs.
They also announced an operating loss of $544 million in the third quarter, compared with operating loss of $25 million in third quarter 2013. Their stock is down close to 11% after hours.
Amazon forecast sales and profit for the holiday quarter that missed analysts' projections, underlining the limits to CEO Jeff Bezos's strategy of spending big to fuel growth. Bloomberg Businessweek's Brad Stone and Bloomberg's Cory Johnson take a look at the numbers on "Street Smart," and wonder if Amazon is going through an identity crisis.
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