Amazon scales back its hardware division at Lab126


The Wall Street Journal is reporting that Amazon has laid off “dozens” of engineers at its hardware development office, Lab126, in Silicon Valley. Along with the layoffs is a broader reassessment of current projects, with some being slowed down and others being stopped all together. Rest assured that there is no mention or indication that the Fire TV is one of the affected projects.

The restructuring at Lab126 is a result of the poor performance of the Fire Phone. One of my sources at Lab126 tells me that many members of the Fire Phone engineering team were reassigned to other projects late last year, with many of them joining the Fire TV team. That shuffling of personnel created many redundant positions, resulting in the layoffs we’re hearing about today.

Some of the projects said to be affected by these changes are a 14-inch tablet codenamed Project Cairo, a projector codenamed Shimmer, and a stylus codenamed Nitro that converts handwritten notes into digital lists. Projects that are still in the works are a kitchen computer codenamed Kabinet that is meant to act as a smart home hub, and a glasses-free 3D tablet using different technology from the Fire Phone. As for the Fire Phone, it’s development has been shifted to Amazon’s headquarters in Seattle and has “stretched out its timeline … indefinitely”.

Lab126 hadn’t had any large layoffs like this in its 11-year history. The effects of the Fire Phone’s misstep, which resulted in a $170 million charge due to unsold inventory, couldn’t be postponed forever.

  1. Jeff says:

    Curious if the last of the Fire Phones went yesterday? It is showing “Unavailable” now as opposed to out of stock. Unless they come up with another pallet from the warehouse, we can be sure based on this news they won’t be producing any more. Glad I snagged one. Thanks Elias for the head’s up on the deal. Hope you get the click-though incentive!

  2. Dustin says:

    I think there is a chance that Amazon pushes the stick and discontinues the Fire TV altogether which would be understandable, but also a shame. They have to be considering the cost of production between the two and the end goal which is to get people into the Amazon ecosystem and the stick at $40 and a lot less sometimes is just really enough for most people. Plus smart TVs, game consoles, there are just so many ways to get Amazon content without the Fire TV.

    The leaked info about the new unit to me looked like a new stick, not sure why everyone jumps to the conclusion that it is a new Fire TV. Will be interesting to see how it plays out but I wouldn’t be surprised to see the Fire TV go the way of the buffalo.

    • Jeff says:

      Really curious to see what Apple comes up with this week around the rumored ATV update. If they really put some effort into, offering streaming packages, etc, they could blow Amazon away here. Wouldn’t surprise me if Amazon didn’t want to compete with that.

      • xnamkcor says:

        Amazon automatically has a fighting chance by being Android based and cheaper than the “gaming” Set-Top Boxes, but with decent power.

    • Jeff says:

      That is… keep the stick for streaming their content, but don’t try to compete in the higher-end market.

      • Charles says:

        You make a good point. But I will be extremely disappointed if they drop the Fire TV box because I really want something with an ethernet input since I went to some trouble to wire the TV room for it. I have a Fire Stick for the bedroom and like it. But a wired unit is always better for me. If Amazon is not going to continue the box I wish they would announce it ASAP before all the Fire TV units at Best Buy are completely gone.

        • Boogir says:

          They made a device to connect the chrome cast via ethernet why couldn’t they do that with the new sticks?

        • BoomSchtick says:

          Not to mention the very useful usb port and the optical audio out!

        • 1000BaseT says:

          I think a lot of people would have trouble streaming 4K video over wifi. Ethernet would be much better for 4K.

          • xnamkcor says:

            Gigabit would help too.

          • Chris says:

            Sorry but that’s simply not true. You can easily stream 4K content on both VuDu & Netflix without it requiring an obscene amount of bandwidth. This means 4K content will stream perfectly via a steady 10-15MBPS connection without ANY trouble whatsoever. The point is, I actually get faster speeds when I tether 4G from my Galaxy S5 (average speeds 32mbps) than my broadband connection. Missy folks shouldn’t have any problem as long as they have a decent connection that remains constant at or above 10mbps.

  3. Rick D says:

    Could mean a lot of things. Based on the rumored affected devices, it may mean they don’t see the demand to branch out much beyond current offerings. Or if it does affect R&D on current products, it could mean the next generation of devices expected next month are expected to have a longer life so they’re limiting focus on continual enhancements.

  4. Michael says:

    Amazon really botched the release of the Fire Phone and thought it had more market pull than it did. It started at $200 with a 2-year contract, had decent, but not flag-ship specs, a very, very custom Jelly Bean build, and you were locked into the Amazon appstore/ecosystem (I do not think that sideloading Google Play was an option at first release).

    That being said, I have purchased two of them…… in the past month as Amazon has been quietly liquidating inventory through some of the major phone resellers on ebay and their own site (I paid $140, twice and have extended prime by 2 years). Also, I have been able to load Cyanogenmod 11 onto the phones and do away entirely with the FireOS. It’s actually a rather snappy little phone and with basically no bloatware through CM11, I like it. Camera apps like snapchat and my banking deposit app don’t work, but I don’t use snapchat and I have other devices to upload checks. Plus, there is a free app in Google Play that does work with the camera.

    I was actually under the impression that a Fire Phone 2 was in the works, but maybe not based upon the layoffs.

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