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Has Amazon hung up the Fire Phone?

Amazon (AMZN) is scaling back it Fire smartphone development efforts, according to the Wall Street Journal.

The Journal reported that Amazon had "dismissed dozens of engineers who worked on its Fire phone" at Lab126, the company's hardware development arm. According to the newspaper, the group has been reorganized, and some projects, including work to develop a large-screen tablet, have been downgraded in priority or shelved.

Amazon declined to comment.

Amazon has seen mixed results in the competitive hardware sector. Its Kindle line of e-book readers helped the company reach an estimated 65 percent of the e-book market. But the company has had less commercial success with the Fire, Amazon's first phone, along with the Fire TV streaming media player.

Amazon's intense work culture praised, rebuked

The Fire Phone received bad reviews shortly after its introduction, with users complaining about the device's ho-hum features and $650 non-contract price tag. As of last October, estimates were that Amazon had sold only about 35,000 units, a sliver compared to popular phones. Amazon also took a $170 million write-off on the Fire.

Throughout its 20 years in business, Amazon has sought to balance investing in new products and services, at the expense of profits, with meeting Wall Street's demands. But trying to sell all things to all people means the company runs the risk of becoming distracted and losing its way.

Unlike someone like Mark Zuckerberg at Facebook (FB), meanwhile, Amazon CEO Jeff Bezos lacks the singular control over the company's stock to keep promising profits at some time in the future without running the risk of being replaced by shareholders.

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