Amazon spent the past two years working on the Fire Phone, but the consumer reaction to the 3D device was not positive, panning the product for its ageing internals and lackluster software—compared to iOS or Android.

The first iteration has not deterred Amazon however, the e-commerce giant is already "back to the drawing board" and is working on the Fire Phone 2, but we may have to wait until 2016 before it comes to market.

Like Us on Facebook

CEO Jeff Bezos is still interested in smartphones, and the Fire Phone is continuing to receive updates. It will also, more than likely, receive more price drops over the two year wait.

Amazon lost $170 million in inventory storage for the Fire Phone in Q3, a large factor in the $544 million operating loss. The amount of R&D that went into features like the 3D display and Firefly has also cost Amazon millions.

It is not the first time Amazon's first iteration has been panned by audiences, the first Kindle did not receive a warm reception. The difference here is the market for smartphones is massive; while the e-reader market has always been rather one-sided.

Amazon needs to work on a variety of issues on the first Fire Phone, including Fire OS in general. It needs more features, more apps and less of an emphasis on purchasing things from Amazon.

The price also needs to be looked at on the Fire Phone 2, if Amazon is going to launch the device with less software appeal. Somewhere in the $299/399 region off contract would be impressive, especially if Amazon thrown in free Prime subscriptions.

Two years to work on the issues does seem like a lot, when smartphone makers are pumping out devices biannually in some cases. The amount of innovation in the smartphone market may also make changes in 2015 to the Fire Phone 2 obsolete by the time it comes to market in 2016.

TagsAmazon, Fire Phone 2, fire phone, Fire OS