Amazon as a whole has razor thin margins. They can't afford to squander hundreds of millions of dollars on anything.

Amazon had razor thin margins because they're spending hundreds of millions on a bunch of different projects that they expect will be the the future of collecting money for stuff and services.

If they stopped that investment, they'd be reasonably profitable. But right now, it's funding their world domination plans.

I fully understand that Amazon invests in these types of projects because they are focusing on growth. The original claim was that hundreds of millions of dollars is a trivial amount of money for Amazon to spend even if a project is a failure. I was simply stating that this is not the case at all. If Amazon has spent 100s of millions of dollars on a smartphone program that turns out to be a failure then it is going to be a painful experience for them.

I'm not saying that Amazon has spent $100 million+ on smartphones. I'm also not saying that the project is a failure. I'm simply responding to the hypothetical claim that 100s of millions of dollars isn't a significant amount of money to Amazon.

They spent $6.5 billion on "Technology and content" in 2013. $100 million is ~1.5% of that. So not quite a rounding error, but close. They also spent ~$5 billion in 2012 and I guess they will spend a similar amount this year.

(That segment includes all sorts of spending, but in the 2013 annual report they do call out devices as one of the focuses of that spending)

The importance of the money isn't just determined by how large of an amount it is compared to Amazon's budget.

Is it already obvious that they have squandered the money spent trying to establish their own device ecosystem?

You don't get it.