Amazon (NASDAQ:AMZN) Fire Phone

Amazon (NASDAQ:AMZN) continues to find itself in hot waters this year, with dipped sales and a $170 million inventory charge. In its response, Amazon (NASDAQ:AMZN) has taken a defensive stand for its Fire Phone, its new product in the market, making claims on its benefits in an attempt to shut off critics. It believes the product is going through a similar cycle as the company’s original Kindle. After the Kindle was launched at $399, the device was bombarded with discouraging speculations, but Kindle ended up being among Amazon (NASDAQ:AMZN)’s success story and is still ranked number one in the e-market.

The Amazon (NASDAQ:AMZN) officials have taken it on, just like the Kindle, and they believe that the Fire Phone will be a victim initially, but will attract consumers with time. According to Amazon (NASDAQ:AMZN)’s Vice President for devices in Europe, Jorrit Van der Meulen, when the e-reader Kindle was released, the company heard many bad reviews, but they remained adamant and kept going, taking the feedback quite well, and used it to improve the product.

But the disturbing news here is that making this continuous comparison to the Kindle, means that the Fire Phone also comes with short comings at this point and only in time, and with a certain amount of criticism, it would hit its benchmark. What Amazon (NASDAQ:AMZN) keeps forgetting at this point is both devices cater to completely different markets.

These different markets make a lot of difference in how well the product will take off. For example, in the time the original Kindle was launched back in 2007. The e-reader market was still new, even though many companies released e-readers, but the market was still in the takeoff phase. The market was young and less aggressive, so the Kindle was quickly able to rise above and even sell its e-book at a loss in order to gain market share.

But this time around, it’s a different market, different set of customers and competitors. In 2007 Apple (NASDAQ:APPL)’s iPhone completely changed the way the game was played. It evolved, players entered and left, some became market leaders. What makes this field even more difficult for Amazon (NASDAQ:AMZN) is that all smartphones are run with app supports. And Amazon (NASDAQ:AMZN) at this stage only has a handful of items, unlike Google (NASDAQ:GOOGL) Play and Apple (NASDAQ:APPL). By June next year, Amazon (NASDAQ:AMZN) will be able to offer around 240,000 apps and games.

Since smartphone is a device used on a daily basis and even for hours, unlike the Kindle where it is only used for reading.

So for Amazon (NASDAQ:AMZN) to just waltz into a 7 year old market where iOS and Android has already made its mark, it will be a difficult step. As the market is already matured, Amazon (NASDAQ:AMZN) is just a bit too late to try and make a mark. In addition, it has already cost the investors over $200 million, they won’t be pleased with any other addition cost added to this hefty sum.