The, Inc. logo is seen on the side of a delivery truck in Brooklyn
The, Inc. logo is seen on the side of a delivery truck in Brooklyn, New York October 23, 2014. Inc is expected to report a third-quarter loss of 74 cents per share and provide an outlook for the upcoming holiday shopping quarter. Reuters/Brendan McDermid

Apparently, Amazon has been speculated to be in the process of coming up with the second generation of the Fire Phone but has decided to "go back to the drawing board." After the poor performance of the smartphone in the market, it looked like a wise move for the company to draw back the launch of its rumoured device.

When Amazon launched the Fire smartphone in July, the company had high hopes that its sales would be something worth bragging about. However, after a few months in the market, it was rather obvious that the Fire Phone was, unfortunately, a flop.

The 4.7-inch smartphone has underperformed and failed to compete with existing players in the market. Since its release last summer of this year, there were unsold handsets worth US$83 million which mainly contributed to the over-all company loss of US$170 million in the last quarter. Despite its amazing features like the parallax display and the "Firefly" identification software, the Fire Phone was not successful in enticing the public, Value Walk reports.

The original Fire Phone is equipped with 2.2GHz quad-core Qualcomm Snapdragon processor with Adreno 330 GPU and 2GB of RAM and its display has a resolution of 1280x720. Amazon's smartphone was also equipped with some innovative features. However, those being mentioned was not enough to stop consumers from ignoring the Fire.

According to Amazon's CEO Jeff Bezos, the company is still willing to compete in the smartphone arena and is keeping the idea of having a follow-up on the ill-fated Fire Phone. And the fact that the company is taking time to study its rumoured device might be a good indication that Amazon is keenly planning the features that will be included in the upcoming device, based on Eteknix' report.

On the other hand, David Limp, Amazon's senior vice president for devices, admitted that a major factor in Fire's relatively poor sales was due to its expensive cost. In AT&T, the exclusive 32GB was available in a US$199 contract price, while the 64GB variant was available for US$299 long-term contract. But after suffering from poor sales, the price dropped to 99 cents, Fortune reports.

When the Fire Phone was first released, the 32GB handset had an initial cost of US$649. Later on the price was reduced to US$449, but the price adjustment did not have any positive effect on the sales figures. Furthermore, the unlocked handset price was finally decreased to US$199. The phone is currently sold at US$449 once again.

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