It’s no secret that Amazon’s first smartphone was a flop with consumers, but behind the scenes, the Fire Phone is also struggling with another key group: app developers.
Several developers who made apps for the first Fire Phone — investing significant time and money to support its unique features, without a major payoff in revenue or customer adoption — tell GeekWire that they aren’t planning to build apps for future versions of the device.
This creates an additional challenge for Amazon as the company tries to recover from the Fire Phone’s lackluster debut, because apps remain a key driver of consumer interest in smartphones.
“It’s going to be a tough sell if they expect people to do it again,” acknowledged Kevin Flynn, co-founder of Mobile Game Partners, who advises companies on how to market their mobile games across platforms.
Several app developers, who spoke with GeekWire on the condition of anonymity because they did not have permission to be quoted, said they did not see the overall volume of customers or revenue to justify continuing to develop for the phone.
“Unfortunately we have not developed our Fire phone specific app any further since our initial focus on it for the phone’s launch,” said one developer. “The usage hasn’t been very high for us, and we’ve focused our Android efforts on other more valuable things.”
Another early Fire Phone app developer said: “I don’t think anyone is excited about developing for [the next Fire Phone]. It sure isn’t on our priority list right now since version one is sucking wind.”
“We put a lot of time and effort into phone launch, and the metrics and revenue we saw didn’t add up. It was a net loss,” said a third developer. “We won’t be supporting the phone going forward.”
Responding to our inquiry about the situation, Amazon says it has very strong relationship with the developer community, citing several testimonials from Amazon developers who have seen higher average revenue per user on Amazon devices than on standard Android phones and on Apple’s iOS.
“Amazon Appstore is a fantastic platform for us and continues to get better,” said Paul Case of TribePlay, in a statement. “Through Amazon we’ve been able to reach a whole new demographic and really succeed with them.”
However, none of the statements directly address the Fire Phone’s performance. Instead they focus on the overall performance of Amazon’s App Store.
Early excitement, disappointing results
It might be hard to remember, but in the run-up to the Amazon Fire Phone launch, the stealthy project was extremely exciting: The company, known for creating such hits as Kindle e-reader and Fire tablets, was set to do it again — this time by disrupting a market dominated by Apple and Samsung.
The hype, including an attention-grabbing teaser video, made it relatively easy for Amazon to find a dozen or more companies willing to secretly build special apps for the phone that took advantage of its signature features.
The Fire Phone’s main differentiating features are Firefly and Dynamic Perspective. The first enables consumers to scan products and other images to quickly conduct web searches, or identify products on Amazon.com. The second uses sensors in the device to detect the direction of the user’s gaze, and adjust the perspective of 3D images on the screen accordingly.
Companies focused on these two special effects to make one-off apps for the platform. For instance, StubHub used Firefly to enable consumers to identify a song playing to find out if a band was performing nearby and buy tickets. It also integrated Dynamic Perspective to allow consumers to see a 3D view of a stadium to find the most ideal seat.
HotGen, a small company in the UK, created the mobile game To-Fu Fury, challenging players to guide a piece of Tofu through several action-based levels to save a character named Fortune Kitty. Amazon CEO Jeff Bezos enthusiastically demonstrated the 3D game onstage during the phone’s unveiling.
But when the phone went on sale last summer, the device didn’t live up to all the hype. Reviewers said the device’s special features got in the way of the user experience as much as they enhanced it. Amazon’s decision to launch the device exclusively on AT&T also didn’t help.
Early estimates pegged sales at no more than 35,000 during its first 25 days on the market. For perspective that was one for nearly every four employees working at the e-commerce giant.
Two months after the lackluster debut, Amazon marked down the cost of the phone to 99 cents with a two-year contract. In the third quarter, Amazon was forced to write off $170 million related to unsold inventory, signaling it had tons of devices sitting on warehouse shelves.
Developers were among the first to see how few devices Amazon sold, watching downloads — and revenue — trickle in.
A valuable but small customer base
To Amazon’s credit, the company continues to be proactive in reaching out to the developer community. On a regular basis, it provides tutorials and advice for how to launch applications on the platform. And since Amazon’s devices, including the Kindle Fire and Fire Phone, all run on a version of Android, it generally isn’t that hard for companies to adapt their existing app for the Fire Phone.
The Amazon App Store lists a total of 240,276 apps that support the device, so there’s no lack of selection (although very few of those apps take advantage of the phone’s unique attributes like Firefly and Dynamic Perspective).
Flynn, the mobile games adviser, agreed that Amazon’s customers are very valuable, noting that each user can generate five times as much as a typical Android user. “Their users are comfortable spending online. We’ve had some games make some decent revenue. It’s totally worth it. I always encourage [developers] to go ahead and put it on Amazon even though it’s a limited market. It’s a valuable user base,” he said.
Tyler Griffin, CEO and co-founder of mobile bill pay app Prism, said the company decided to create a version of its app for Fire Phone even though it only has a dozen employees. “There’s almost no work involved as a developer to get an app on the Fire,” he said. “It’s more surprising that more companies don’t do it…It’s not a big driver of growth, but they made it completely seamless.”
But it’s one thing to get developers to support the Fire phone by simply porting over a version from Android. It’s a completely different matter to build an app that leverages the device’s differentiating features, giving users a reason to choose Amazon’s phone over another Android device. One might take a day, whereas the other could take weeks.
Where Amazon heads next isn’t clear. In an interview last June, when the Fire Phone was unveiled, Amazon vice president Ian Freed vowed that Amazon was in the smartphone business for the long haul, describing it as a “multi-year, multi-decade” initiative for the company. Freed, who oversaw marketing for the device, has since taken a sabbatical as part of a shakeup of the Fire Phone team.
Repairing relationships with developers is on a long list of items that need to be addressed before launching another device. Other platforms have faced similar circumstances, and have resorted to guaranteeing revenue or paying for the development of the app to get developers interested. None of the Fire Phone app developers we spoke with for this story had received offers to build an app for the next device.
“It was a tough sell the first time,” said Flynn. “I still think there will be interest out there; [Amazon] just has to follow-up correctly.”