WSJ: Amazon likely abandoning smartphone ambitions following failure of Fire Phone

A report in the WSJ suggests that Amazon is most likely abandoning plans to make any further smartphones after the failure of the Fire Phone.

In recent weeks Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter […]

The company told some smartphone engineers earlier this year that further phone development would be shelved, though one of the people said Amazon has shifted the effort to its hometown of Seattle … 

The Fire Phone was panned in reviews, partly on the basis of its gesture-control feature being merely a gimmick, but mostly for charging $649 for a device that fell a long way short of Android phones available at the same price level. The company was later forced to slash the price to $199 with a free Prime subscription, giving it an effective price of $100 – or just 99 cents with a contract.

The price later dropped to a net price of just $30 before being apparently withdrawn from sale, Amazon writing off $170M, mostly for unsold inventory.

The WSJ says that the failure of the Fire Phone unsurprisingly hit morale at the Lab126 unit where it was designed, with many employees leaving the company.

Some workers say Lab126’s shifting and, at times, enigmatic priorities, including a planned high-end computer for the kitchen, have contributed to a frenetic workplace and ill-defined roles. That has led a number of workers to take jobs at other tech firms, the people said.

While Amazon has not ruled out another attempt at a smartphone, sources said that it “has stretched out its timeline for smartphone development indefinitely.”

Given the somewhat warmer reception given to Amazon’s voice-control system Echo, the company is reportedly now focusing its Lab126 efforts on smart home devices.

Still in the works is a high-end computer for the kitchen—code-named Kabinet—designed to serve as a hub for an Internet-connected home and capable of taking voice commands for tasks like ordering merchandise from Amazon.com.