The last time Amazon tried to make a phone, it sold fewer than 35,000 units in two months before the price crashed from $650 to 99 cents. The Fire Phone became one of tech’s most cautionary tales, a product nobody asked for, built around gimmicks nobody wanted. That was 2014. Amazon hasn’t touched smartphones since.
Until now. Reuters confirmed this week that Amazon is developing a new smartphone internally codenamed “Transformer” and this time, the entire bet is on AI.
The project sits inside a team called ZeroOne, a year-old unit tasked with building “breakthrough” devices. It’s led by J Allard, the former Microsoft executive behind the original Xbox and Zune working under fellow Microsoft veteran Panos Panay, who now runs Amazon’s entire devices and services division. That’s serious hardware pedigree for what would be Amazon’s second attempt at a phone.
The vision is ambitious. The Transformer is described as a “mobile personalization device” that syncs with Alexa and serves as a daily conduit to Amazon’s entire services ecosystem Prime Video, Prime Music, Grubhub, Amazon.com. AI is the backbone: Alexa+, Amazon’s LLM-powered assistant upgrade that attracted tens of millions of sign-ups within its first nine months, would be a core feature. Sources suggest AI capabilities could even eliminate the need for a traditional app store which, notably, is exactly what killed the Fire Phone last time.
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Interestingly, Amazon is exploring two form factors: a conventional smartphone and a simplified “dumbphone” variant inspired by the minimalist Light Phone; fewer apps, less screen time, more voice. The Transformer could even launch as a secondary companion device rather than a primary handset.
The timing is genuinely difficult. Apple holds 31.5% of global smartphone shipments, Samsung 21.4% together controlling more than half the market. Recent AI-native hardware like the Humane AI Pin and Rabbit R1 both stumbled badly after launch. And global smartphone shipments are projected to decline 13% in 2026 amid rising component costs.
Amazon hasn’t started carrier talks yet, the budget is undefined, and sources openly acknowledge the project could still be scrapped.
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