by Kevin Coupe
The Wall Street Journal reports this morning that Amazon is pulling back from its commitment to the technology hardware business.
"In recent weeks Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter.
"The layoffs were the first in the division’s 11-year history, these people said. But the precise toll on its roughly 3,000-person staff couldn’t be learned, in part because Amazon typically requires employees to sign a nondisclosure agreement in exchange for severance payments.
"The company also has scaled back or halted some of Lab126’s more ambitious projects - including a large-screen tablet - and reorganized the division, combining two hardware units there into one, people familiar with the matter said."
What's interesting about the story is that it suggests that Amazon's approach to hardware has been less focused than one might expect of the company - initiatives and roles were not always well-defined, resulting in products like the Fire Phone that ended up being bombs. The Journal notes that the "$180 Echo virtual assistant, a voice-activated speaker, has developed something of a cult following, if not yet mass appeal." And the company has been working on a number of products that would lead to a so-called "smart kitchen."
I don't think that retrenchment is the same thing as surrender, and I suspect that Amazon will continue to focus on creating a technological ecosystem that will use hardware to make it easier to acquire products ... which is pretty much always the endgame for all its hardware.
Let's not forget that Amazon's biggest hardware success has been a little thing called the Kindle - which virtually made e-reading mainstream. When Amazon hits a home run, it tends to be a grand slam. (Of course, when it strikes out, there are some who think the world is coming to an end.)
There's nothing wrong with stepping back and rethinking one's approach to any category ... the result, I suspect, could well be an Eye-Opener.
The Wall Street Journal reports this morning that Amazon is pulling back from its commitment to the technology hardware business.
"In recent weeks Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter.
"The layoffs were the first in the division’s 11-year history, these people said. But the precise toll on its roughly 3,000-person staff couldn’t be learned, in part because Amazon typically requires employees to sign a nondisclosure agreement in exchange for severance payments.
"The company also has scaled back or halted some of Lab126’s more ambitious projects - including a large-screen tablet - and reorganized the division, combining two hardware units there into one, people familiar with the matter said."
What's interesting about the story is that it suggests that Amazon's approach to hardware has been less focused than one might expect of the company - initiatives and roles were not always well-defined, resulting in products like the Fire Phone that ended up being bombs. The Journal notes that the "$180 Echo virtual assistant, a voice-activated speaker, has developed something of a cult following, if not yet mass appeal." And the company has been working on a number of products that would lead to a so-called "smart kitchen."
I don't think that retrenchment is the same thing as surrender, and I suspect that Amazon will continue to focus on creating a technological ecosystem that will use hardware to make it easier to acquire products ... which is pretty much always the endgame for all its hardware.
Let's not forget that Amazon's biggest hardware success has been a little thing called the Kindle - which virtually made e-reading mainstream. When Amazon hits a home run, it tends to be a grand slam. (Of course, when it strikes out, there are some who think the world is coming to an end.)
There's nothing wrong with stepping back and rethinking one's approach to any category ... the result, I suspect, could well be an Eye-Opener.
- KC's View:
