When Amazon's Fire Phone Fails, It Will Be Jeff Bezos' Fault

Jeff Bezos has a lot of strengths, but product design isn't one of them. Dynamic Perspective delayed the Fire Phone by years, which will be a fatal mistake.

Jul 6, 2014 at 11:00AM

You have to admit: Jeff Bezos is a business visionary. The man has leveraged his strategic acumen to turn Amazon.com (NASDAQ:AMZN) into a massive e-commerce empire. However, he does have a weakness: Bezos is not a "product guy."

According to a recent Bloomberg Businessweek report, the primary reason the Fire Phone took so long to launch was that Bezos became "obsessed" with the Dynamic Perspective feature. Former Amazon director of user experience Lowell Goss said that including it delayed the device for "years," since it required extensive research and testing.

The thing is that "years" in the smartphone market is effectively an eternity, especially in a world dominated by Apple (NASDAQ:AAPL) and Google. Smartphone manufacturers come and go nowadays. Xiaomi is only four years young and has become one of the fastest-growing smartphone OEMs in the world. Once upon a time, HTC was the king of the Android camp, but now it's fighting for its life. Waiting this long for Dynamic Perspective will prove to be a fatal mistake.

When Apple launched iOS 7 with a subtle parallax effect, it didn't take long for some users to develop motion sickness. It got so bad that Apple issued a software update in March to mitigate the effects. Dynamic Perspective appears to be iOS 7's parallax on steroids. It may be premature to call since the Fire Phone doesn't ship until later this month, but it's highly unlikely that this feature will prove to be worth the wait.

The first signs that Amazon was working on a smartphone emerged way back in 2011, when a Street analyst conducting channel checks caught wind of the device. At the time, a Q4 2012 launch was expected. The analyst also figured that Amazon would stick with its strategy of selling the device near cost. Wrong on both counts.

Many have panned Tim Cook for similarly not being a "product guy" like his predecessor. There's a key difference, though: Tim Cook is self-aware enough not to call all the shots with product design. Bezos, on the other hand, does not appear to have this quality. Goss says that Bezos is basically the sole product manager at Amazon. In contrast, Cook delegates product design to the actual designers throughout Apple, while making strategic decisions.

Ideally, Dynamic Perspective proves to be an important differentiating factor that sets the Fire Phone apart from the iPhones and Androids of the world. In reality, it will probably end up as a short-term novelty that was pursued at the cost of long-term strategy.

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Evan Niu, CFA, owns shares of Apple and has options on Amazon.com. The Motley Fool recommends and owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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