Amazon Working on New Smartphone After 2014 Fire Phone Disaster

Amazon is secretly developing a new smartphone called "Transformer" more than 10 years after its Fire Phone failed spectacularly. The device would heavily integrate with Alexa and artificial intelligence to make Amazon shopping and services easier to access.

More than a decade has passed since Amazon’s Fire Phone became one of the company’s most embarrassing failures, but the tech giant is quietly working on another attempt to break into the smartphone market.

Four sources with knowledge of the project reveal that Amazon is developing a new mobile device internally called “Transformer” within its devices and services division. The smartphone concept centers around creating a highly personalized experience that would seamlessly connect with Amazon’s Alexa voice assistant and provide constant access to the company’s services throughout users’ daily routines.

This latest smartphone venture represents another step toward fulfilling founder Jeff Bezos’ longtime dream of creating an omnipresent voice-controlled computing system similar to the computer featured in the “Star Trek” science fiction franchise.

Bezos originally imagined a mobile device built around shopping functionality that could compete with Apple by offering Prime membership benefits like fast shipping and exclusive discounts. Such a device would also provide Amazon with valuable user data that smartphones uniquely capture, combined with customers’ purchasing patterns and entertainment preferences.

Reuters has exclusively reported on Amazon’s smartphone development efforts. However, key details remain unknown, including projected costs, expected revenue targets, and the total investment Amazon plans to make in the initiative.

The project’s timeline remains uncertain, and sources warn that Amazon could abandon the effort if strategic priorities change or financial concerns arise.

Amazon representatives refused to provide comment on the matter.

According to the sources, who requested anonymity due to lack of authorization to discuss internal projects, the new device’s customization capabilities would streamline access to Amazon.com shopping, Prime Video streaming, Prime Music listening, and food ordering through partners like Grubhub.

Artificial intelligence integration has become a central element of the Transformer initiative, sources indicate. This AI focus could potentially eliminate traditional app stores by removing the need to download and register applications before use.

While Alexa would play a significant role in the phone’s functionality, it wouldn’t necessarily serve as the device’s main operating system, according to the sources.

The brief history of AI-powered hardware devices includes numerous failures, such as the Humane AI pin and Rabbit R1 assistant, both designed to provide generative AI access without requiring computer or smartphone logins. Poor reviews led to both products being discontinued.

Despite these setbacks, other major companies continue pursuing AI-integrated devices that move beyond traditional smartphone app interfaces. OpenAI is collaborating with former Apple design executive Jony Ive on multiple hardware prototypes, while Apple, Google, and Meta are creating new AI-enhanced glasses, watches, and headphones.

Although Amazon’s AWS dominates global cloud computing infrastructure, the company has struggled to shed its reputation for being slow to develop AI applications while competitors have advanced rapidly.

Alexa, which completed a comprehensive AI-driven redesign before relaunching in 2025, is considered internally crucial to Amazon’s future consumer service offerings. Sources describe the smartphone project as another Amazon strategy to increase customer AI adoption either directly on the device or through Alexa integration.

Amazon’s original 2014 smartphone launch featured innovations like camera-based shopping technology that could identify products, locate them on Amazon.com, and add them to customers’ online shopping carts.

However, the Fire Phone’s custom Fire OS operating system lacked popular applications available through Android and iOS app stores. Additionally, its complex multi-camera system for 3D image display consumed excessive battery power, causing frequent overheating problems.

Despite bundling a complimentary year of Amazon Prime membership, the Fire Phone sold poorly. Amazon slashed pricing from $649 unlocked to $159 before ultimately discontinuing the device after 14 months, resulting in a $170 million loss from unsold inventory.

R.W. Baird financial analyst Colin Sebastian noted that Amazon’s previous smartphone failure doesn’t necessarily prevent future success, but acknowledged significant challenges ahead. “Amazon will have to give consumers a compelling reason to switch phones and people are pretty attached to the existing app stores,” Sebastian stated.

Just as it faced over ten years ago, Amazon confronts the challenging task of competing against market leaders Apple and Samsung, which together controlled approximately 40% of global sales last year according to Counterpoint Research, a technology market research company.

Furthermore, smartphone shipments are projected to experience their largest decline ever in 2026, with an expected 13% drop according to International Data Corporation, as rising memory chip costs increase device prices.

The smartphone project is being managed by ZeroOne, a year-old group within Amazon’s devices unit tasked with creating “breakthrough” products, sources revealed. J Allard, a former Microsoft executive who worked on devices including the Zune music player and Xbox gaming console, leads ZeroOne.

Panos Panay, who heads Amazon’s devices and services division, has been working to address years of financial losses in the department. This includes developing an upcoming tablet that will operate on Android instead of Fire OS for the first time and could retail for approximately $400, as Reuters first reported.

Three individuals involved with the Transformer project confirmed the phone remains in development. Amazon has investigated both conventional smartphone designs and simplified “dumbphone” options with limited features that could help address screen addiction concerns. The company has not yet approached wireless carrier partners about the device, these sources indicated.

Two sources mentioned that the Light Phone has served as inspiration for the new device – a $700 minimalist smartphone featuring a camera, map, calendar, and few other functions, excluding an app store or web browser.

A simplified phone design could help Amazon position the device as a secondary handset to complement customers’ existing iPhones and Samsung Galaxy devices, sources suggested. Such basic phones, including the Light Phone and flip phones, represented 15% of global handset sales in 2025 according to Counterpoint Research.

Independent wireless analyst Chetan Sharma noted that limited data exists regarding multi-phone usage patterns. Currently, he explained, the practice is most prevalent among business professionals seeking a second device away from employer oversight or parents wanting to provide teenagers with social media-restricted phones.