Amazon's Fire Phone is dead, after a price drop from $199 on contract to $0 on contract for AT&T, the e-commerce giant is offering another sale, this time knocking $250 off the off contract price for the smartphone.

The Fire Phone is now only $199 off contract, putting it in the same leagues as HTC One X, Moto G and the Galaxy S3. In this market, the Fire Phone is actually quite a smart deal.

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Under the veil of the holiday sale, Amazon has potentially made it possible to get rid of the $83 million worth of inventory stock for the Fire Phone. The company took an operating loss of $544 million in Q3 and expects an even larger loss in Q4, mostly due to the Fire Phone.

It is unclear if Amazon is interested in manufacturing more units for the Fire Phone. If the sale blows up, Amazon might look to manufacture more, but it is currently sitting on a hefty inventory.

When Amazon launched the Fire Phone, it came with a myriad of issues, not least being AT&T being the only carrier in the U.S. The smartphone ran Fire OS, an operating system with a much smaller apps store and lackluster features.

The main feature Amazon showed off was Firefly, a smart service for finding out the price for certain items in real life. The 3D display was also a major feature, offering maps and other applications in full 3D without the need for glasses.

Firefly, even if interesting from a far, quickly wears off and becomes more of a service to sell more Amazon products. The 3D display is also a rather gimmicky feature, with a lack of developer support making it only useful on Amazon apps.

This is what the Fire Phone is: Amazon's device to sell you products on Amazon. It is clear to see the idea didn't work - customers don't want to be the product of a smartphone they just paid $600 (or now $199) for - regardless of the "coolness" of a feature.

Amazon has said they will return next year with the Fire Phone 2. It is unlikely to start at such a high price and Amazon should look into higher-specs. The 3D display will most likely stay, considering the three years of work Amazon put into making the display technology.

The iPhone 7 is rumored to feature a 3D display as well, maybe Amazon was quick to start the trend. If Apple reveals a 3D display, it will surely boost Amazon's Fire Phone 2 success.

TagsAmazon, fire phone, Fire OS