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Amazon admits Fire Phone price failure as sales dry up

Amazon was always going to find it challenging to take a giant leap into such a hotly contested place as the smartphone market. It seems that the commerce company's first attempt, the Fire, has become more of a damp squib.

Just two months after the phone went on sale Amazon slashed its price down to 99 cents (with a two year contract). Now the company has admitted that they may have made a mistake charging as much as they did in the first place.

Related: Amazon Fires up new OS for tablet range

"We didn't get the price right," senior vice president David Limp admitted to Fortune. "I think people come to expect a great value [from Amazon] and we sort of mismatched expectations."

"We thought we had it right. We're also willing to say 'we missed', and so we corrected [the price]."

That miss has hit company right in the bank balance, as it announced last week it was taking a charge of £105 million related to the Fire Phone's lack of success.

Amazon's new handset was intended to be a quick and easy addition to a regular Amazon user's life. It included bonuses such as a free year of Amazon's premium delivery service Prime, something the company may still be banking on as its market research has found that those using the service spend almost twice as much online as those not signed up.

Read more: What was our verdict on the Fire Phone?

Amazon still hasn't released the total sales figures for its new smartphone and, the way things are going, it looks like they will be keeping mum on that for the time being. The company has admitted, however, to having $83 million (£52 million) worth of Fire Phones unsold going into its fourth quarter.

Customer reviews of the new phone have also been less than glowing, averaging around two and a half stars across 3,399 reviews.