Amazon set to take another shot at the smartphone market

In 2014, Amazon introduced its first smartphone, hoping to take on Apple and Samsung. Instead, the Fire Phone, overseen directly by founder Jeff Bezos, was scrapped in barely over a year, one of Amazon’s highest-profile flops.

Now, Amazon is dialling up a new phone.

The latest effort, known internally as “Transformer”, is being developed within its devices and services unit, according to four people familiar with the matter. The phone is seen as a potential mobile personalisation device that can sync with home voice assistant Alexa and serve as a conduit to Amazon customers throughout the day, the people said.

The initiative is the newest chapter in a yearslong effort to bring to market Bezos’s long-held vision of a ubiquitous voice-driven computing assistant akin to the voice-controlled computer in science fiction series Star Trek.

Bezos had envisioned a smartphone that had shopping at its core and could take on Apple by offering shipping convenience and discounts through the Prime membership. Along the way, Amazon could gain a wealth of new data about users only available through mobile phones combined with purchase history and content preferences.

The timeline for Amazon’s Transformer project is unclear, and the people cautioned it could be scrapped if the strategy shifts or due to financial concerns. An Amazon spokesman declined to comment for this story.

Transformer project

As envisioned, the new phone’s personalisation features would make buying from Amazon.com, watching Prime Video, listening to Prime Music or ordering food from partners like Grubhub easier than ever, the people said. They asked for anonymity because they were not authorised to discuss internal matters.

A key focus of the Transformer project has been integrating AI capabilities into the device, the people said. That could eliminate the need for traditional app stores, which require downloading and registering for applications before they can be used.

Alexa would likely be a core feature but not necessarily the primary operating system of the phone, the people said.

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Indeed, the short history of AI-embedded hardware is marked by failed entrants, including the Humane AI pin and Rabbit R1 assistant which both sought to make generative AI available without the need to log in to computers or mobile phones. Both suffered poor critical receptions, and the Humane pin was discontinued.

That has not deterred others from pursuing AI-native devices that do away with the app-driven visual language of smartphones. OpenAI is working with former Apple design chief Jony Ive on several hardware prototypes, while Apple, Google and Meta are developing new AI-embedded glasses and other devices, such as watches and headphones.

“Amazon could have an opportunity,” Francisco Jeronimo, vice president of data and analytics at International Data Corporation, wrote in a research note on Friday. The company “brings together a powerful services ecosystem spanning commerce, content, cloud and an existing AI foundation with Alexa, along with deep expertise in data-driven customer engagement”.

But, “the window of opportunity is tiny”, he wrote. “Every major player is moving in the same direction.”

While Amazon’s AWS is dominant in providing global cloud computing infrastructure, the company has sought to overcome a reputation for being flat-footed in offering AI applications as rivals have sped ahead.

Alexa, which underwent a multi-year AI-led revamp before its new launch in 2025, is seen internally as critical to Amazon’s future in consumer-facing services. The phone, the people said, is another attempt by Amazon to accelerate customers’ AI usage either on the device or through Alexa.

Amazon’s initial entry into the smartphone market in 2014 included features such as a camera-based shopping tool that recognised products, found them for sale on Amazon.com and put them in customers’ online carts.

The Fire Phone’s proprietary Fire OS lacked popular apps available in the Android and iOS app stores, and had a complicated multi‑camera screen system for displaying 3D images that used so much battery power that the handset often overheated.

Daunting task

Amazon packaged the Fire Phone with a free year of Amazon Prime, but it nonetheless sold poorly. Amazon cut the price from $649 unlocked to $159 and ultimately cancelled the phone after 14 months, taking a $170-million charge for unsold inventory.

Colin Sebastian, analyst at financial firm RW Baird, said the fact that Amazon has failed before with a smartphone doesn’t make it insurmountable to try again, but cautioned that it will be difficult. “Amazon will have to give consumers a compelling reason to switch phones and people are pretty attached to the existing app stores,” he said.

As it did over a decade ago, Amazon faces the daunting task of unseating market leaders Apple and Samsung, which together commanded about 40% of global sales last year, according to Counterpoint Research, a technology-focused market research firm.

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And smartphone shipments are headed for their biggest decline ever in 2026, expected to plunge 13%, according to IDC, as surging memory chip prices drive up device costs.

The project is being led by a year-old group within Amazon’s devices unit called ZeroOne, whose mandate is to create “breakthrough” gadgets, the people said. ZeroOne is led by J Allard, a former Microsoft executive involved in such devices as the Zune music player and Xbox gaming console.

The head of Amazon’s devices and services unit, Panos Panay, has been working to reverse years of unprofitability in the division. That includes a forthcoming tablet that will — for the first time — run Android instead of Fire OS and could sell for around $400.

Three people who have worked on the Transformer project said the phone is still under development. The company has explored both a traditional smartphone and a so‑called “dumbphone” with more limited features that could help counter screen addiction. Amazon has not yet sought wireless carrier partners for the device, these people said.

One inspiration for the new phone has been the Light Phone, two of the people said, a $700 minimalist smartphone with a camera, map, calendar and not much else, such as an app store or web browser.

A dumbphone or feature phone could also help Amazon market it as a potential second handset to accompany iPhones and Samsung Galaxies already in customers’ pockets, the people said. Such handsets, like the Light Phone and flip phones, accounted for 15% of global handset sales in 2025, according to Counterpoint Research.

Scant data exists on how many people carry more than one phone, said Chetan Sharma, an independent wireless analyst. Nowadays, he said, the practice is most common among white-collar workers who want a second phone away from the prying eyes of their employers or parents who want a device to give to teenagers to limit access to social media.  — Greg Bensinger, (c) 2026 Reuters