In one of the most surprising revelations made by Amazon.com, Inc (NASDAQ:AMZN), the giant e-commerce retailer slashed the price of its first Smartphone, Amazon Fire, to 99 cents just two months after its debut.
Amazon.com, Inc (NASDAQ:AMZN)’s shares fell 1.87% after the announcement, especially after considering the huge price cut in both 32-GB and 64-GB Fire phone versions. Amazon Fire 32-GB was introduced at a price of $199 whereas the 64-GB version was available for $299. After the price cut, customer can buy the 32-GB version for 99 cents with a two-year contract and the 64-GB version would be available for $99. Further, the 99 cents phone would be available with the one-year Amazon Prime service for a limited-period.
Earlier, Chitika, online advertising network, revealed the Amazon Fire received 0.02% ad impression after its initial release in North America. None of its acclaimed features including a holographic screen or software for product recognition was able to elevate the sales. Unlike Amazon.com, Inc (NASDAQ:AMZN)’s expectations of selling 2 to 3 million phones by the end of the year, it was able to sell only 35,000 phones in its first 25 days.
For some, it might seem as a publicity stunt to raise customer interest in Amazon’s first Smartphone, as the announcement came just one day before Apple Inc (NASDAQ:AAPL) is planning to launch iPhone 6. On the contrary, some experts are of the opinion that by offering Fire phone at bottom-low prices, Amazon.com, Inc (NASDAQ:AMZN) is planning to attract more and more customers into its ecosystem. Once the customers are within the system, they could be lured with more purchasing offers; hence, improving the online sales of the company.
This article has been written by Prakash Pandey.