Anaylsts Split On Amazon's Firefly Pricing & Strategy

Amazon.com's AMZN newly launched Firefly smartphone came under the microscope Thursday as analysts tendered mixed views on pricing and strategy. A skeptical Eric Sheridan of UBS maintained a Neutral rating and $365 target Thursday, saying Amazon's strategy of "pushing deeper into hardware" may boost sales but hurt profit margins because of higher costs. Analysts appeared divided over whether the $199 cost to consumers was a good thing. It's a comparable price to that of competing smartphones. “The price point is competitive,” assuaging fears the phone would cut into Amazon's profit margins, Topeka Capital analyst Victor Anthony said in a research note. Anthony maintained a Buy rating on Amazon and a $140 price target, and believes the phone compares favorably with other high-end smartphones on the market. But, Doug Anmuth of JP Morgan and Ben Schachter of Macquarie were separately disappointed with pricing. "We were hoping for a game-changing pricing model, which didn't emerge," Schachter said, while maintaining a buy rating and $430 target. Anmuth expressed concern that Firefly's price point and the cost of related apps might “curb its appeal.”