The E-3 [email protected] is a phone which also offers video phone calls, email and internet browsing. Initially priced at £99 it was reduced to £49 last Easter.
Critics of the device have pointed to the price of 12p for receiving emails as a major disadvantage compared to normal PC-based email.
Amstrad is writing down the value of stock worth £5.7m and will now seek to sell direct to national telecoms firms.
Julian Hewett, chief analyst at Ovum, said: "People will buy a cheap PC and get broadband rather than use a device like this. There is no role for an emailer or a videophone.
"It is the latest generation of many to fail at creating a market for video telephony. Even in large firms where they have videoconferencing suites it is rarely used."
Dr Kuan Hon criticises GDPR consent emails that will only eviscerate marketing databases and 'media misinformation'
Apple squashes Steam Link app on 'business conflicts' grounds
Philip Hammond wants to forget rules that the UK agreed with the EU to ban non-European companies from the satellites
Instapaper to 'go dark' in Europe until it can work out GDPR compliance