Amazon reportedly scales back hardware division after Fire Phone debacle

Following an unsuccessful attempt to make its mark on the smartphone market with the Fire Phone, Amazon is said to have laid off dozens of employees at its hardware unit, Lab126. Although several projects are still in the works at the facility located in Sunnyvale, California, the retailer is said to have scrubbed development of a huge tablet with a 14-inch screen and a smart stylus along with its smartphone ambitions:

The company told some smartphone engineers earlier this year that further phone development would be shelved, though one of the people said Amazon has shifted the effort to its hometown of Seattle, under Steve Kessel, an executive who helped spearhead the company's hardware unit and previously oversaw its strategy for digital media like e-books and music.Amazon has also halted or scaled back other development projects, according to people familiar with the situation, including a smart stylus internally called Nitro, which translates a users' scribblings into digital shopping lists; a device dubbed Shimmer for projecting images on walls and other surfaces; and a tablet code-named Project Cairo, with a 14-inch screen.

The Fire Phone, which was in development for four years, failed to drum up sufficient sales at launch, mainly due to an exorbitant launch price. Amazon quickly slashed the on-contract price of the phone down to 99 cents, which wasn't enough to warrant enough attention from consumers. The lack of Google services didn't make matters any easier, with Amazon having to take a $170 million write-down on unsold inventory of the phones.

The focus for the hardware unit — which is now folded into a single division made up of of Kindle tablet and e-reader teams — is on smart home products, such as the Echo speaker. Projects currently underway at the division reportedly include a high-end computer for the kitchen, a glasses-free 3D tablet and a Kindle with a battery life of up to two years:

Still in the works is a high-end computer for the kitchen—code-named Kabinet—designed to serve as a hub for an Internet-connected home and capable of taking voice commands for tasks like ordering merchandise from to give up on 3-D, Amazon also is developing a tablet with images that will seem to pop out at the user without wearing special glasses. This technology differs from the Fire phone's, which appears to give images on the phone's screen more depth.Engineers at Lab126 also said they hope to produce a battery for Kindle e-readers that could last up to two years on a single charge, up from the current six weeks to two months.

Source: The Wall Street Journal

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Harish Jonnalagadda
Senior Editor - Asia

Harish Jonnalagadda is Android Central's Senior Editor of Asia. In his current role, he oversees the site's coverage of Chinese phone brands, networking products, and AV gear. He has been testing phones for over a decade, and has extensive experience in mobile hardware and the global semiconductor industry. Contact him on Twitter at @chunkynerd.