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Amazon Scales Back Its Hardware Division

Discussion in 'Off-Topic Discussion' started by ChrisG8, Aug 28, 2015.

  1. ChrisG8

    ChrisG8 Well-Known Member

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    Amazon scales back its hardware division at Lab126

    The Wall Street Journal reported dozens of engineers were laid off. Amazon shows the Fire TV box and Fire Phone as unavailable with no indication when or if either will be in stock. After huge losses, Amazon probably won't have another phone.
     
  2. guest

    guest Active Member

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    What's needed is a box that's open-source. They exist. Neither Fire TV nor Google TV are, though. Anyone that purchased either will always use them knowing that any updates will be from some corporate gatekeeper that doesn't have the interests of the user-community at heart.
    Is there a Linux TV or Mozilla TV on the market. I think either of those would be open-source.

    PS - Isn't Chromebox updated only with the consent of Google management? I can't believe that it would be an open source product.
     
  3. CatfishRivers

    CatfishRivers Well-Known Member

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    Yes all of the Chromebox updates come automatically from Google. However there is a way to run Linux OS on a Chromebox. Running Linux on the Chromebox involves setting it to "developer mode". There's full instructions online for how to do it.
     
  4. ChrisG8

    ChrisG8 Well-Known Member

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    It doesn't look to me like there will be a new version of the Amazon Fire TV box, the Fire TV Stick may continue. I like the Fire TV box better than Roku or Apple TV although all three are good devices and easy to use but without having use the Fire TV Stick, I can't know whether it works as well. The hardware isn't as nice, lesser processor and no voice control remote but it appears to run the same apps. It looks like this just isn't something Amazon can do profitably and Amazon may bow out..
     
  5. CatfishRivers

    CatfishRivers Well-Known Member

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    IMO Amazon will continue with the Fire TV stick. It's inexpensive and sells very well (currently the #1 selling product in the Electronics category on Amazon). It ties into the Amazon ecosystem so it makes sense for Amazon to keep it going. Their big flop was their phone. Android TV boxes (the official ones certified from Google) on the other hand - are selling about as well as some of the better selling GTV boxes did (mediocre to fair). Chromecast is Google's inexpensive TV device that sells very well.
     
    Last edited: Aug 29, 2015
  6. ChrisG8

    ChrisG8 Well-Known Member

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    The Amazon Fire Phone is the #1 seller in unlocked cell phones on Amazon, I think cell phones period as of today. Amazon lost a couple hundred million on it so I am not sure the Amazon Fire TV Stick is profitable, most probably sold at $19, surely at a loss for the hardware then the difficult prospect of making a profit on accessories and services for the device became the goal.

    http://www.amazon.com/gp/product/B0...rue&ref_=ox_sc_sfl_title_2&smid=ATVPDKIKX0DER

    I know the Amazon Fire TV Stick and Google Chromecast sell well enough that both will continue, at least for the short term. It isn't clear how well Android TV devices are selling although based on limited availability at local stores, I would guess not very well. Google TV was better represented during its first year of release here.
     
  7. jonw747

    jonw747 Well-Known Member

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    If the Fire Stick is updated with a faster processor, it may be able to function as a Fire TV replacement; albeit not for those of us who make use of the Fire TV's ethernet, USB, and SPDIF ports.

    But to Amazon, it should serve the purpose of delivering their content and costing them the least. After all, to them, it's not about the hardware sales, it's about the Prime subscriptions, the App store sales, and the movie rentals.

    And of course the Fire Phone is selling well, it's priced at $130 where you get $100 back towards Prime ... so to somehow who wants Prime, it's a $30 phone, music player, toy, gadget, etc. The problem is, Amazon wanted to sell it at Flagship prices.

    Amazon has found a neat niche, and hopefully they won't stray too far from it again, but if they create devices that deliver their eco system plus some extras with top-end features at a ridiculously low price ... they will continue to find success.
     
  8. ChrisG8

    ChrisG8 Well-Known Member

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    I am afraid selling devices with top-end features at ridiculously low prices isn't a way to continue success, it is a failed businss model, no profits isn't a way to building a successful business. There is no shortage of devices to access Amazon Instant Video rentals, Amazon Prime Instant Video or Amazon Prime Music and selling more at a loss won't help any at all.

    Amazon isn't saying much about it, but I believe Amazon has taken such a big hit to the bottom line trying to sell hardware that the Kindle line and Fire TV Stick may be all that is left. I wouldn't even bet on those long term.
     
  9. jonw747

    jonw747 Well-Known Member

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    The "Fire Phone" was the big hit to the bottom line that led to the cut backs. That was a huge miscalculation on many levels.

    They simply don't need to make a profit on their H/W sales if it's fueling the rest of their business and I'm sure they're well aware of the pluses/minuses of being able to provide their own solution .vs. leaving it in a 3rd parties hand to deliver their content.

    I have confidence that a company which can hang in there for 20 years without making a profit can figure this stuff out. :)
     
  10. ChrisG8

    ChrisG8 Well-Known Member

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    Netflix actually makes a profit without being concerned about providing their own hardware, with over 40 million subscribers. I don't think Netflix would be doing better by losing money on hardware and I don't Amazon can make that a success either, I don't expect the Amazon Fire TV to be replaced. A cheaply made, no profit device like the Fire TV Stick may be breakeven, may result in some losses but insignificant to the bottom line, it can continue.

    Amazon did figure it out and laid off most of their engineers and I suspect will quit trying to design cheap devices with top-end features, a guaranteed losing proposition in this market. Apple goes for top-end features and top-end prices, that market always offers profit potential.
     
  11. CatfishRivers

    CatfishRivers Well-Known Member

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    The Amazon Fire TV was listed higher on the Amazon sales charts than any of the official Android TV boxes. When you consider that with the Fire TV it was basically a tie-in to Amazon services - I don't see how any third party manufacturer of an Android TV box is going to be making much if any profit. The third party Android TV manufacturers don't have the benefit of tyeing in to a huge ecosystem that THEY own (like Amazon does with Fire TV). Plus the Nexus TV (which ties in to Google services) sells much worse than the Fire TV box did - and I don't believe that Google fully subsidizes the cost of Nexus TV. I believe Asus is taking on some if not all of the market risk. IMO Chromecast is a big success - however Android TV is "struggling".
     
    Last edited: Sep 3, 2015
  12. jonw747

    jonw747 Well-Known Member

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    The difference here is that Amazon has built an "eco system", Netflix is a subscription based content provider. Instant Video is primarily a perk to encourage customers to continue to subscribe to Prime which encourages them to shop with Amazon, buy their products, buy their movies, buy their Apps, games, earn their "coins", etc. Don't know about you, but with 2-day and 1-day delivery it really works for me. For instance, even when Best Buy has the same price on an item as Amazon, sometimes I will just buy it through Amazon and wait a day in exchange for saving the trip up the road.

    Anyway, I've read nothing that's blamed any of Amazon's problems on anything other than the Fire Phone. If they move away from the Fire TV and towards the Stick, I don't think it will be because they're displeased with the sales of the TV, but because they feel the Stick gets the job done for cheaper.

    The Stick is just going to need to be fast enough to run all the games in the store.
     
  13. CatfishRivers

    CatfishRivers Well-Known Member

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  14. ChrisG8

    ChrisG8 Well-Known Member

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    Lacking evidence there will be another Fire TV STB model and ignores the fact the engineering staff has been gutted. An Amazon developed replacement seems very unlikely to me, a rebranded model from somebody else, maybe, but even that makes no sense.

    Amazon Prime Instant Video and Amazon Prime Music are not lacking devices for access, losing money to try to put more in consumer's hands after the enormous losses selling hardware can't be part of the company's plans. An iPhone 4 and newer can all access those services as can iPad, Roku, Chromecast, Android devices, Kindle tablets, most smart TVs and Windows computers, phones and tablets. The software designed exclusively for FireOS, never got off the ground and amounts to next to nothing and won't take off now.

    As far as the games, designed for tablets and phones in Amazon's appstore, who thinks an Amazon Fire TV console to play those on the big screen is a big deal? I sure don't, I own hundreds of them, free from Amazon with their free app of the day promos the last few years and I don't want a console but there are already plenty available to play them if I did. The games designed for touchscreen portable devices are not well suited for consoles anyway.
     
    Last edited: Sep 7, 2015
  15. ChrisG8

    ChrisG8 Well-Known Member

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    You are going to have to show me this great eco system that can generate profits for Amazon to justify selling hardware at a loss. The Amazon services that people use are accessible by hundreds of millions of devices in consumer's hands already with more coming all of the time. The services tied to Amazon hardware only, those are all dead, that concept failed to fly.
     
  16. jonw747

    jonw747 Well-Known Member

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    Chris- the reports were that the Fire TV team was expanded when the Fire Phone team was broken up. Lab128 has not been gutted to my knowledge, and projects like Echo continue to roll. As for eco-system, Amazon Prime simply doesn't stand on it's own very well; but because Amazon is so aggressive incentivizing being a Prime member, they've been able to grow the market. Any sale of an App, Movie, or show is easy profit; but the biggie is how Prime leads to customers ordering through Amazon.

    I appreciate that Amazon instant video is becoming both available and improved on 3rd party devices. Amazon never had a completely closed system like Apple, just like Fire OS was never a completely closed system.
     
  17. CatfishRivers

    CatfishRivers Well-Known Member

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  18. jonw747

    jonw747 Well-Known Member

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    They're really pushing the definition of tablet there ... 6" ...
     
  19. ChrisG8

    ChrisG8 Well-Known Member

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    I am not sure that product will be well received either. The article I read last night indicated Amazon only had 1% of the tablet market but the 6" models were not included, those weren't considered tablets. If that is true, I would say Amazon tablets have bombed as well but I do believe Amazon generally sells tablets at a profit so it isn't a costly bomb, just a tiny niche market product. I have a Kindle Fire HDX 7" and think it is a good tablet, very fast.

    It appears there is some demand for the Amazon Fire TV player now that the supply has disappeared, I listed a new, sealed AFTV on eBay. Someone sent a request I offer Buy-It-Now, so I did at $117 shipped which was the lowest price I could find on eBay. I had two buyers with questions and a third that quickly bought it without asking a question, within minutes. One of the two that missed out because of his question, which was already part of the auction description seemed bummed as if he has been having a hard time finding one at that price.

    I know from selling other things that are low demand and very low supply, that doesn't mean much, once supply is available, the limited demand is fulfilled and it is hard to sell again.
     
  20. jonw747

    jonw747 Well-Known Member

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    Definitely nice timing. If the buyers think it may be rootable, that may have also increased the demand; albeit there's a heckuva lot you can do with the device these days even without root.
     

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