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Amazon reports big losses thanks to failed Fire Phone experiment

Amazon Fire Phone
Amazon's Fire Phone has backfired terribly

After a flopping Amazon Fire Phone performance, Amazon is deep in the red.

According to the company's third quarter earnings report its losses have increased to $544 million (about £339m, AU$621m). That's 20 times the losses compared to last year's $25 million (about £12m, AU$22m) operating loss.

The major contributing factor for this is undoubtedly Amazon's recent unsuccessful experiment with the Fire Phone. Amazon Chief Financial Officer Tom Szkutak noted that the company took a $170 million (about £106m, AU$194m) hit stocking and selling the unpopular phone.

Amazon also has $83 million (about £51m, AU$94m) worth of Fire Phone inventory in its warehouses.

Amazon has also invested into the development of new products including the Fire TV and Kindle Voyage and a new Amazon Dash barcode reader. Not to mention that giant load of cash it dropped on its recent acquisition of Twitch for $970 million (about £605m, AU$1.1b).

Sales are up to little effect

Despite this massive operating loss, Amazon's net sales saw a 20% increase with revenue amounting to $20.58 billion (about £12.83b, AU$23.49b) in this third quarter. Despite these numbers, it's still less than investors were expecting.

The big take away from Amazon's earnings is we're likely not in for the Fire Phone 2 anytime soon. Given that critics panned the handset and consumers were lukewarm on the device, the likelihood of another Amazon Phone isn't looking good.