The e-commerce giant is preparing another attempt at the mobile market more than a decade after its Fire Phone became one of its most expensive failures.
The new device, internally codenamed "Transformer," represents a pivot toward artificial intelligence and voice assistant integration rather than repeating the gimmicky 3D features that doomed its predecessor. The initiative is being developed within Amazon's devices and services division, according to four people familiar with the matter who spoke to Reuters.
Unlike the Fire Phone's focus on visual effects, this handset aims to sync deeply with Alexa and serve as what company documents describe as a "mobile personalization device." This approach reflects founder Jeff Bezos' long-held vision of creating a ubiquitous voice-driven computing assistant similar to science fiction depictions.
Amazon launched its first smartphone in 2014 with ambitions to challenge Apple and Samsung directly. Instead, the Fire Phone overseen by Bezos was scrapped within 14 months after failing to gain traction with consumers. The company cut prices from $649 to $159 before ultimately canceling production entirely, taking a $170 million charge for unsold inventory.
The Transformer marks Amazon's latest effort to embed AI throughout its consumer products ecosystem. Alexa would likely be a core feature but not necessarily serve as the phone's primary operating system, familiar with development discussions. The hardware division has reportedly considered launching both traditional smartphone models and simplified "dumbphone" versions that strip away distractions while maintaining access to Amazon services.
Project leadership falls under ZeroOne, an Amazon devices unit established recently and headed by J Allard, Vice President of ZeroOne and former Microsoft executive, who previously co-founded Xbox and helped create the Zune music player. The team has been tasked with inventing breakthrough consumer product categories rather than incremental improvements to existing offerings.
This renewed push comes as Amazon increases its planned capital spending for 2026 to approximately $200 billion, up significantly from roughly $130 billion disclosed for 2025. The investment surge coincides with broader industry competition around AI integration into mobile devices across major technology companies.
Market conditions present challenges for any new entrant. Apple and Samsung together commanded about 40 percent of global smartphone sales last year according to Counterpoint Research data, while overall shipments are projected to decline approximately 13 percent in 2026 due partly to rising memory chip costs driving up device prices.
The company faces particular hurdles around app ecosystem development that contributed to the Fire Phone's failure.
"Amazon will have to give consumers a compelling reason to switch phones and people are pretty attached to the existing app stores," said Colin Sebastian, senior research analyst at Baird Equity Research.
The Transformer project remains in early development stages and could still be canceled entirely before reaching consumers. Its progress represents part of Amazon's broader hardware strategy that includes forthcoming tablets running Android instead of Fire OS for the first time.
