Dive Brief:
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In the wake of its Fire phone’s dismal debut, Amazon is revamping its hardware-development unit, the Wall Street Journal reports.
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The company’s first-ever layoffs have taken place in recent weeks at its Silicon Valley Lab126 development center, though few details are known. Amazon has not commented.
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The unit is also reportedly scaling back some of its ambitions for the Kindle tablet and e-reader, which is wildly successful. The company’s “Dash” button and especially its smart wireless Echo speaker have garnered good reviews and a following, if not massive sales.
Dive Insight:
The Fire phone’s face-plant debut could be a result of too much micro-managing from Jeff Bezos, who reportedly dictated some of the engineers’ and designers’ priorities based on his own idiosyncratic vision and, perhaps, his vision for Amazon’s retail sales.
The result was a somewhat gimmicky and over-priced phone that seemed designed to delight Amazon itself, and not so much its users.
Meanwhile, these moves come at a time when the “Internet of Things” and devices for the “connected home” are reaching price points and capabilities that appeal to a mainstream consumer looking for energy savings and convenience. That makes it unlikely that Amazon will abandon its hardware-development unit, though changes are clearly afoot, and probably necessary.
“What Amazon makes are devices that are not too flashy, but they are inexpensive and they are simple to use,” IDC analyst Tom Mainelli told the Wall Street Journal. “Mostly they are another way to serve up content that Amazon can sell you. The next logical step for them is a fully connected home. With the data they have, they could soon be at the point where all the things you need just arrive at your home, without even asking.”
