"Your margin is my opportunity" is probably my favorite Bezosism. Given that perspective and Apple's very cushy margins, I expected Amazon not to approach the market with an expensive phone packed with new features, but to approach the market from the bottom, with a good phone that is free or nearly free. The problem, of course, is that Google seems to have that segment wrapped up.
Instead of competing with the iPhone, this seems to more targeted at Android -- only priced uncompetitively.
The features themselves seem slightly gimmicky. I tend not to want to move my phone physically as a way to interact with apps. (Doing that figure "8" when my GPS goes out for some reason is incredibly awkward.) Searching via photos is awesome, but the only use case it seems well suited for is shopping. The built-in Genius Bar is cool, but it seems targeted toward smartphone noobs, which is oddly coupled with features targeted to smartphone pros.
If I'm reading the tea leaves correctly, this will probably be a novelty, like Windows Phone, for a while to come.