I worked at Amazon for a while and the point to note is that the Fire phone, despite being a public failure, led to a lot of things at Amazon. For ex: 1. The computer vision and machine learning stuff behind the 8 cameras on the Fire phone has been repacked and reused at multiple places. There's also a object recognition service in AWS if I remember correctly. 2. The FireOS, which powered the Fire phone, is being used on all Kindles except the older e-ink Kindles.

While the hardware division was indeed shut down, Amazon did manage to salvage as much as they can.

The cloud service didn't take a life on its own - in the very early days there was just EC2 and S3, nothing else. It took a lot of focused investment, commitment and trust from the management to give the AWS experiment more time so that it could succeed and eventually it did.

Fire phone was one of Amazon's many experiments. It failed sure, but hey you miss 100% of the changes you don't take.