In 2014, Amazon launched its first smartphone, hoping to compete with Apple and Samsung. In contrast, the “Fire Phone,” a project under the direct supervision of Jeff Bezos, was taken off the market in just over a year, one of Amazon’s most publicized failures. Now, Amazon is preparing a new phone, Reuters exclusively reveals.
Four people familiar with the matter told Reuters that the new effort, known internally at Amazon as “Transformer,” is being developed within the company’s devices and services unit. The phone is seen as a possible “mobile personalization” device that can sync with the Alexa voice assistant and serve Amazon customers throughout the day interested in its other services such as online commerce, according to the sources.
The initiative is the latest chapter in a years-long effort to bring to market Bezos’ long-held vision: a ubiquitous, voice-controlled digital assistant similar to the voice-controlled computer in the sci-fi series “Star Trek.”
Bezos had envisioned a shopping-centric smartphone that could compete with Apple by offering convenient delivery and Prime discounts. At the same time, Amazon could have obtained a large amount of new data about users, available only by combining mobile phones with purchase history and content preferences.
The price that Amazon would ask for its new smartphone is currently unknown
Reuters was unable to ascertain some details about the upcoming smartphone, such as the expected selling price, the revenue Amazon hopes to make from its sale or how much money it has made available to the team working on the project.
The timeline for the “Transformer” project is also unclear, and sources have warned that it could be canceled if the company’s overall strategy changes or for financial reasons.
As designed so far, the phone’s new customization features would make shopping on Amazon.com, watching Prime Video, listening to Prime Music, or ordering food from partners like Grubhub much easier.
A central point of the “Transformer” project was the integration of artificial intelligence (AI) capabilities into the device. This could eliminate the need for traditional app stores, which require them to be downloaded and registered before they can be used.
Voice assistant Alexa, which underwent a multi-year AI-centric upgrade before its relaunch last year, is seen within the company as critical to its consumer-facing services.
The new smartphone, the sources say, is another attempt by Amazon to accelerate customers’ use of AI, either on-device or through Alexa.
The “Fire Phone” Disaster
Amazon’s initial entry into the smartphone market in 2014 included features such as a camera-based shopping tool that recognized products, found them for sale on Amazon.com and added them to customers’ online carts.
The “Fire Phone”, with its own operating system “Fire OS”, lacked popular apps available in the Android and iOS stores and had a complicated multi-camera 3D display system that consumed so much battery that the phone frequently overheated.
Amazon offered the “Fire Phone” along with a free one-year subscription to Amazon Prime, but sales were poor. Amazon dropped the price from $649 to $159 for unlocked phones and eventually canceled the project after 14 months. A $170 million loss on unsold inventory went into the accounting documents.
Colin Sebastian, an analyst at financial firm RW Baird, told Reuters that Amazon’s previous failure with a smartphone did not make a new attempt impossible, but that success would be difficult to achieve.
“Amazon will have to give consumers a compelling reason to switch phones, and people are pretty attached to existing app stores,” he says.
As it did more than a decade ago, Amazon faces the difficult task of unseating market leaders Apple and Samsung, which together accounted for about 40 percent of global sales last year, according to Counterpoint Research, a technology-focused market research firm.
In addition, smartphone shipments are headed for their biggest drop in history in 2026, with analysts at International Data Corporation expecting a 13% plunge as rising memory chip prices drive up device costs.
