Is the smartphone market already THAT saturated?
What would have made a better phone focusing in consumables by Amzn customers is a one handed phone with a builtin barcode reader (which is did have with a dedicated button) that will directly find/order the item. Making buying and ordering their priority function.
However, conjecturing, but I believe they may be working on another phone. Lower cost focusing on the more ludicative India market. Probably also coincides with them getting and probably launching soon their satellites for internet. And also trying to figure how not to be based on Android.
It's why WindowsPhone and BlackBerry10 failed - fantastic OS but a lack of apps.