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.
Additionally, Amazon makes a lot of money off of services and digital content, not just physical goods. Pushing (like with the Fire HD tablets) integration with those into the base experience plus running their own Android app market (they can always go under Google Play's percentage, and if they gain market share they'd get a lot more apps loaded to it) seems like a more lucrative and compelling option.
They missed it and Google is now heavily investing in KaiOS pushing Google Assistant and their other services.
I don't think it would be far stretch to start anew in a "new" country ripe for new beginnings. Particularly when their gov is blocking most apps anyways. Good way for Amzn to work into their system without offending their gov. Amzn is a company who will sell your soul to the devil for a penny because there is 7 Billion potential new accts. Btw they have already moved away from android on their Echo devices onto their own RTOS.
I know FB tried and failed to roll out and get adopted with their FB phone, but that's bc they are FB. At this point, failure is their only option. Unfortunately with 2 Billion naive users with no viable alternative, FB death will be slow although they did just provide a "take with you" option of all of your posts so.. may be speeding up? but again to where?
It's why WindowsPhone and BlackBerry10 failed - fantastic OS but a lack of apps.