Amazon’s New Venture into Smartphones
In 2014, Amazon launched its first smartphone, intending to take on tech giants like Apple and Samsung. Unfortunately, the Fire Phone, which was closely monitored by founder Jeff Bezos, was discontinued after just a year—marking it as one of Amazon’s most notable flops.
Now, it seems Amazon is back at it with new smartphones.
This latest initiative, codenamed “Transformer,” is being developed within Amazon’s devices and services division, as confirmed by several sources. The phone is designed to automatically sync with Alexa, the company’s home voice assistant, and is envisioned as a personalized mobile device that would facilitate interactions with Amazon’s services throughout users’ daily lives.
This project represents an important part of Bezos’ long-term ambition to create a voice-driven computing experience akin to those seen in “Star Trek.” In particular, he imagined a smartphone that not only competes with Apple but also prioritizes shopping by providing handy shipping options and exclusive deals for Prime members. In doing so, Amazon could gather rich data on user habits, drawing not just from shopping history but also from what they enjoy consuming.
Details of Amazon’s phone development hadn’t been reported until now. There are still unknowns regarding the phone’s pricing, potential revenue, or how much financial commitment Amazon has directed toward this project.
The timeline for the “Transformer” initiative remains vague, and sources have stated that changes in strategy or budget could lead to its cancellation.
An Amazon representative chose not to comment on these developments.
The anticipated personalization features on the new phone are aimed at simplifying purchases from Amazon.com, streaming Prime Video content, enjoying Prime Music, and ordering meals through partners like Grubhub, according to insiders who requested anonymity.
The project’s primary focus will be on integrating artificial intelligence into the device. This could potentially eliminate the traditional need for app stores, where apps must be downloaded and registered before use.
Although Alexa will likely be significant, it may not serve as the phone’s primary operating system.
The history of AI-enabled gadgets has seen its share of failures, with devices like the Humane AI pin and the Rabbit R1 assistant falling short of expectations. Critics were quick to dismiss these innovations, resulting in their discontinuation.
Nevertheless, the pursuit of AI-native devices continues. Companies like OpenAI are working on hardware prototypes in collaboration with former Apple designer Jony Ive, as Apple, Google, and Meta explore new AI-enhanced devices like glasses, watches, and headphones.
While Amazon’s AWS offers substantial advantages with its global cloud infrastructure, the company has been striving to shed its image of falling behind in the AI race as competitors forge ahead.
Indeed, Alexa’s evolution—built on years of AI advancements before its expected launch in 2025—is deemed vital to Amazon’s trajectory within consumer services. This phone is seen as a fresh approach to encouraging customers to engage more with AI, either directly on the device or through Alexa.
Amazon’s inaugural venture into the smartphone market in 2014 included unique features like a camera that could recognize products and add them directly to online shopping carts, a convenient if flawed innovation.
Yet the Fire Phone’s operating system, Fire OS, fell short by lacking popular apps available on Android and iOS. It also introduced an energy-intensive multi-camera setup to showcase 3D visuals, which often led to overheating issues.
Even with a year of complimentary Amazon Prime membership, sales were dismal. The price was slashed from $649 to $159, and the device was ultimately abandoned just 14 months after launch, with Amazon reporting losses of $170 million on unsold stock.
Colin Sebastian, a financial analyst, pointed out that Amazon’s previous smartphone missteps don’t necessarily spell doom for this new attempt. However, he cautioned that persuading consumers to switch phones would be a significant challenge, especially since many are very attached to their existing app ecosystems.
As before, Amazon faces the uphill battle of trying to unseat the reigning smartphone titans, Apple and Samsung, who collectively captured around 40% of the global market last year, according to Counterpoint Research.
Estimates from the International Data Corporation predict that smartphone shipments could see a record decline of 13% in 2026, driven by soaring memory chip prices that are set to raise device costs.
The new project is spearheaded by a team called ZeroOne within Amazon’s devices division, dedicated to creating innovative gadgets. This group, led by former Microsoft executive J. Allard, aims to develop products that stand out in the market.
Panos Panay, who heads the devices and services division, is striving to turn around years of losses in that sector. Among the upcoming projects is a tablet that may run Android instead of Fire OS, expected to retail around $400.
The Transformer phone remains in development. Insights from the project indicate that Amazon is exploring both conventional smartphones and simpler devices, sometimes referred to as “dumb phones,” which could help address issues like screen addiction. So far, they haven’t reached out to wireless carriers for distribution.
Interestingly, one inspiration cited for the new phone is the Litephone, a minimalist device priced at $700 that includes just a camera, maps, and calendar features while lacking a full app store or web browser.
Such more basic devices might also serve as secondary phones for users already tethered to iPhones and Samsung Galaxies. According to Counterpoint Research, these alternative devices, including light and flip phones, could account for 15% of global sales by 2025.
Independent wireless analyst Chetan Sharma noted that data on multi-phone ownership is sparse. Currently, it seems most common among professionals wanting to keep work and personal communications separate, as well as among parents choosing simpler devices for their teens to limit social media access.
