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Fortune reports that Amazon CTO Tom Szkutak has conceded that not only has his company taken a $170 million charge, mostly associated with the Fire phone and related supplier costs, but it also has "a huge surplus of $83 million unsold phones collecting dust somewhere."

But that doesn't mean that Amazon is giving up.

According to the story, "Amazon Senior Vice President of Devices David Limp acknowledged Amazon bumbled the phone’s pricing. Traditionally, Amazon undercuts the competition on hardware, pairing lower prices and solid features. But with the Fire phone, Amazon stuck to standard industry pricing, asking $199 for the 32 gigabyte model and $299 for the 64 gigabyte. On that front, Amazon, well, misfired. 'We didn’t get the price right,' Limp admitted. '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'."

Correct is right. Amazon reduced the price from $199 to 99 cents.

Fortune writes, "In September, the company slashed the Fire phone’s price from $199 to 99 cents, a steep discount Limp said yielded significantly better sales. He also pointed out that two software updates since the Fire Phone’s launch ironed out some problems customers were having with the device … Limp pointed out other Amazon devices, like its Fire tablet line and Fire TV streaming box, that he described as being 'very successful' with customers, but he declined to discuss sales numbers.

"With the Fire phone, Amazon plans to stay the course, as it has with its Kindle readers. As CEO Jeff Bezos likes to point out, critics panned the first Kindle e-reader in 2007, but it evolved into a widely-used family of products. Likewise, Amazon seems intent on taking the same long-term approach with the Fire phone, despite a competitive smartphone market."
KC's View:
Funny, but I don't remember the Kindle being passed when it first came out. I just remember how thrilled I was when I first held one in my hands. Though I do remember how many people hated the name "iPad" when it first came out, saying it sounded like a woman's sanitary product and not a tablet computer.

Guess folks got those things wrong.

I'm not surprised that Amazon plans to stay the course, but I continue to believe that they made a significant error with the Fire Phone. I can only use myself as a test case - in fact, my contract is up right now and I'm due for a new smartphone. But Amazon never really gave me a reason to consider its version, never gave me any motivation to look beyond the iPhone.

And I'm a pretty devoted and consistent Amazon customer.

If Amazon can't get someone like me to make a change, who can they get?