Amazon's (AMZN) Fire Phone is burning a hole in the company's pocket.

Announced in June this year, the Fire Phone has so far been a financial failure for the company. Amazon has lost $170 million in inventory commitments for the third quarter alone, and is currently sitting on a $84 million inventory of Fire Phone units.

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On AT&T, the Fire Phone quickly went from $199 on a two-year contract to $1 on a two-year contract. The same thing happened to the unsuccessful "Facebook Phone" developed by HTC, which looked to add Facebook Home as the default operating system.

The Fire Phone offers some new features, the most prominent being the three dimensional effect on the phone without the need for glasses. However, these features, alongside Amazon's own Fire OS for smartphone, have not worked on the general audience in the U.S.

Amazon even tried to give away a free year of Amazon Prime ($99) to make the Fire Phone more attractive to consumers, but like so many of these service-designed smartphones they fail to deliver the full package Apple, Samsung and other providers are capable of offering.

The Fire Phone was also quite overpriced for the specifications, and you could tell Amazon had been working on the hardware for a few years, prior to release. It feels like Amazon worked a lot on the software, and some of these services could be useful on iOS and Android - just not as a fully fledged OS on its own.

Many expect Amazon will drop the Fire Phone either this year or next - unless Jeff Bezos is feeling like the second-edition of the smartphone will be better. The Kindle Fire tablet got off to a hot start, but the Fire Phone has fell on deaf ears; perhaps an upgrade to the internals and price drop would do it some good.

TagsAmazon, fire phone, Amazon Q3 earnings