“You’ve gotta spend money to make money” is an age-old adage in business circles, and based on a recent report from The Verge, it is also the adage that Amazon.com is adopting as its motto this year.

According to the article from The Verge, Amazon stock took a 5 percent dip yesterday when the company showed $126 million in operating losses for 2014’s second quarter alone. That figure was almost double what stock analysts had predicted for the online retailer, and it understandably caused some jitters among that company’s Wall Street advocates.

The worst part of the news, however is that, according to Amazon, we ain’t seen nothing yet.

The company expects to lose somewhere between $410 million and $810 million in the third quarter. Such predictions are enough to make even the most strong-willed investors jump ship. Indeed, the numbers look almost catastrophic on paper, but analysts have already cautioned against taking them as the sign of a swift and sudden descent into the red for Amazon. The operating losses can be easily explained by one thing: the launch of the Fire Phone, Amazon’s first smartphone model.

With how much the smartphone industry is currently worth, and with how much other companies like Apple and Samsung spend to design, test, and market their iPhone and Galaxy products, it really is no surprise that Amazon is pushing the Fire Phone with a boatload of money. Production, development of games and other apps for the device, and work on curated movie, book, music, and TV show services for the device could continue to drain Amazon’s coffers in the coming months.

With the Fire Phone actually making its United States launch today, it seems as if Amazon cannot be too far from turning the ship around and making a profit from the device. However, as with other electronic devices in the Amazon product stable, like the Kindle and the Fire TV, Amazon is actually planning to sell the Fire Phone at a loss, with the goal of making up that money in other areas. It’s the same strategy that companies like Sony and Microsoft use with their video game consoles, and Amazon is hoping that the sale of games, apps, books, movies, music, and other items will help the company break even on the Fire Phone project. Particularly, Amazon is hoping that the phone will help to promote the sale of Prime subscriptions.

Still, a near-billion-dollar loss is a hard pill for any investor to stomach, and even with the promise of a new Amazon smartphone on the market, it could lead to a period of falling stock valuation for the world’s biggest online retailer. After all, the smartphone market is a competitive place, and if the Fire Phone for some reason fails to take off, then Amazon and its investors could end up having to eat their losses entirely.