Amazon Wants to Build a Smartphone Again. Here's What We Know.

Amazon is working on a new smartphone called 'Transformer', with help from Alexa, the company's voice assistant. This is Amazon's first major smartphone effort in a decade, following the failure of its Fire phone in 2014. The project is led by Panos Panay, who arrived at Amazon from Microsoft in 2023 to head the company's devices division.

However, Panay has been cautious about committing to actually releasing the phone. When asked directly by the Financial Times if Amazon planned to launch a smartphone, Panay said the company is "not necessarily" planning one, according to The Verge. That careful wording suggests Amazon learned lessons from its last smartphone attempt.

Who's Building It and How

The Transformer phone is being developed by a team inside Amazon called ZeroOne, run by J Allard. Allard is a former Microsoft executive who helped create both the Xbox gaming console and the Zune music player. His presence signals that Amazon is bringing in experienced hardware talent from outside its normal teams.

The development team has considered different versions of the phone. Some designs look like traditional smartphones. Others strip things down to bare essentials, inspired by minimalist devices like the Light Phone. This suggests Amazon is still figuring out what shape a voice-first phone should take.

The phone would put Alexa Plus—Amazon's newer AI assistant—at the center of how you interact with it. Instead of tapping a screen, you would primarily use your voice. This is different from how iPhones and Android phones typically work.

Why This Failed Before

Amazon tried to enter the smartphone market in 2014 with the Fire phone. It came with special features like Dynamic Perspective (which adjusted the screen based on viewing angle) and Firefly (which could scan objects and link to Amazon products). The phone also bundled 12 months of Amazon Prime and unlimited cloud photo storage.

None of it worked. Consumers didn't want it. Amazon stopped making the Fire phone and wrote off $170 million in losses. The company then stepped away from smartphones entirely, though it continued making Alexa devices for the home and Amazon tablets.

This kind of failure is not unusual. We have seen similar patterns when other large companies tried to break into the smartphone market. Microsoft poured significant resources into Windows Phone and even partnered with Nokia, the Finnish phone giant, but couldn't compete with Apple's iPhone and Google's Android system. The smartphone market was already locked in by the time these challengers arrived.

Panay's track record at Microsoft included leading the Surface division, which created the Surface Duo—a phone-like device with two screens. His presence at Amazon suggests the company might try something different rather than building a standard phone.

The Bigger Picture

Panay has hinted that the Transformer phone is part of something larger. Amazon is exploring "a whole new set of form factors" for AI devices, he said. This means phones might not be the only focus—Amazon could be thinking about watches, glasses, or other wearables powered by AI.

This strategy fits with Amazon's existing skills. The company has been working on voice recognition and artificial intelligence through its cloud division, AWS, for years. Amazon has the infrastructure to power AI features that smaller companies cannot afford to build.

Other major technology companies are heading in the same direction right now. OpenAI, Google, and Apple are all investing in voice-controlled AI systems that work differently from today's app-focused phones. This shift could change how people interact with phones and other devices over the next few years.

The Real Challenges Ahead

Amazon faces a difficult problem: app availability. When the Fire phone failed, one reason was that it couldn't run the popular apps available on iPhones and Android phones. Fire tablets tried to solve this by offering a version of Android, but it still lacks many applications that people want.

A new Amazon smartphone would face the same gap. The company would either need to make it fully compatible with Android apps or position it as a specialized device for specific tasks—not a replacement for a standard smartphone.

There is another hurdle. Wireless carriers like Verizon and AT&T focus almost entirely on iPhones and Android phones. Amazon would need to convince carriers to stock and support a new phone, and it would have to offer something genuinely different to make that worthwhile.

Looking at what this enables, Amazon's renewed interest in phones reflects a larger bet the company is making: that talking to AI will eventually become the primary way people use mobile devices, not tapping apps or typing. If that shift happens, and if Amazon executes well, the Transformer project could position Amazon as a phone maker alongside its roles in online retail, cloud services, and home devices.

The careful tone from Panay suggests Amazon is not rushing. The company might test the phone in limited markets or with specific groups of people before deciding on a full launch. That approach would help Amazon avoid repeating the Fire phone disaster while exploring whether a voice-first phone can actually work in the real world.