Nov 26, 2014 · 2 minutes

Amazon has reduced the price of its unlocked Fire Phone to $199. That's what most consumers pay for smartphones with a two-year contract to a wireless carrier. At this rate, it's only going to be a few months before Amazon offers people money to take the Fire Phone off its hands.

You might think Amazon would at least nix the free year of Amazon Prime -- which costs $99 per year for most consumers -- with this latest price reduction. You would be wrong, though: the company still plans to offer the promotion to anyone who buys the discounted Fire Phone. The company might as well grab a few hundred million dollars, pile it up, and take a torch to it.

Amazon could have saved itself a lot of trouble if it had just done that from the beginning. The Fire Phone never made sense for consumers, as Pando's James Robinson noted before it was even revealed to the public, because of Amazon's almost-pathological need to convince people to shop in its marketplace and no one else's. Consumers don't want a smartphone that's good at scanning barcodes: they want a product that allows them to easily manage their digital lives.

That sentiment was proven correct when reviewers gave the Fire Phone a lukewarm reception and the Guardian reported in August that Amazon had probably sold just 35,000 Fire Phones in the month after its debut. (It's worth mentioning that the Guardian's report is an estimate based on third-party data -- Amazon famously refuses to reveal its sales figures to the public.)

Then, in October, Amazon wrote off $170 million because of the Fire Phone's weak sales. If ever there were a product that managed to attract headlines for years before its debut only to result in a total flop when consumers were asked to care about it as a real device instead of a concept, the Fire Phone would be it. And now Amazon's cutting the product's price again? That's insane.

It's not clear what Amazon will get from any sales of the Fire Phone at this new price. Anything it might have made from device sales will be reduced or obliterated by the free subscription to Amazon Prime, especially if the Fire Phone is like the company's other hardware products and sold at cost. And it's not like these customers are going to become constant Amazon shoppers. Amazon is scraping the bottom of the economic barrel, and it won't find a whole lot down there.

But that won't stop Amazon from trying again. The company is reportedly planning to invest some $55 million in its hardware division over the next five years. Given everything that's happened with the Fire Phone and Amazon's failure to replicate the Kindle's success, it seems unlikely that the investment will end well. Amazon just has to hope that all its efforts to invoke flame-related imagery don't ultimately reduce the company to a pile of smoldering ashes.

[illustration by Brad Jonas]