They likely already have followup designs in the pipeline, never to see the light of day now. Amazon missed the mark about as hard as they could have. I bet they aren't even surprised that people didn't want an expensive AT&T locked phone without access to the Play Store and a gimmicky head tracking feature.
Amazon would have been better served with a multiple carrier inexpensive phone. Look at a phone like the Moto G, the phone is cheap and runs great (depending on the version). They should have done something around that price <$100 (off contract) and tried to move volume to pimp out Amazon services.
As I like to tell people: Amazon desperately wants to be Apple (a hardware company with fully integrated services), but it doesn't really understand what that means or have the talent to make it happen. For all of its lock-in, Apple at least designs products for what it thinks customers want -- Amazon is designing products primarily for what it wants (to make you buy from Amazon more often).
Given that Amazon just lost a few hundred million dollars in one quarter, it's probably going to scale back its hardware ambitions. I don't know that it can afford a second Fire phone, and the bad reputation may spill over to the Kindle Fire line in the process.