From what I can tell, the phone's 3-D capabilities and Firefly, the product-scanning feature are groundbreaking additions. But like the Kindle Fire, which was a direct response to Apple's iPad, Amazon's razor-blade model will continue to cut into the company's margins.

The device will sell. But investors shouldn't expect to see the any boost to the bottom line for many more years. The Fire Phone is no different from other launches. Don't forget Bezos' ambitions have been scattered.

He's launched e-books and e-readers. He took the fight to Apple in tablets. He's attacked Netflix (NFLX) with his Prime movie streaming. He's recently launched a music streaming service to take on Pandora (P). He's also working on his Amazon Fresh online grocery service, taking on supermarkets.

None of these projects have boosted the bottom line, where it matters. Investors are getting impatient. 

The Fire Phone is yet another product aimed at increasing Amazon's "stickiness" with consumers. There's no doubt Bezos knows the endgame for his company. He's just not sharing what he envisions Amazon's true earnings potential to be. The fact that the stock is down 17% year to date suggests that he better start talking about Amazon's survival.

At the time of publication, the author was long AAPL.


This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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