Key Points
More than a decade after the failure of its Fire Phone, Amazon is making another attempt to enter the smartphone market. According to four sources familiar with the matter, the company is developing a phone codenamed "Transformer."
This new effort is being conducted within its devices and services division.
The device is envisioned as a personalized mobile companion that will seamlessly integrate with Alexa, simplify e-commerce transactions, and serve as a continuous connection point between the retail giant and its users.
This strategy aligns with founder Jeff Bezos's long-held vision of creating a voice-activated computing companion that mimics the communicator from "Star Trek." This vision faced setbacks in 2014, and Amazon is now making a second attempt.
The Fire Phone Disaster: A Cautionary Tale
Amazon's first smartphone was launched in June 2014 at a price of $649, with high expectations. The device featured Fire OS, a customized version of Android, equipped with a 3D visual system with four front-facing cameras and the Firefly product scanning feature.
The Fire Phone remains one of Amazon's most significant commercial failures to date.
New Strategy: AI-Centric Approach
About a year ago, Amazon's hardware division established a dedicated team called ZeroOne to advance the "Transformer" project. The team's mission is to create "breakthrough" consumer electronics. J Allard, a former Microsoft executive known for his contributions to Xbox and Zune, is leading this project.
Artificial intelligence is the foundation of the Transformer vision. The core idea is that comprehensive AI capabilities can completely eliminate the need for traditional app stores. Users will interact through Alexa and local AI-driven features without the need to install and configure separate applications.
OpenAI is collaborating with former Apple design chief Jony Ive to develop AI-driven hardware. Meta, Apple, and Google are also working on AI-enhanced smart glasses and other wearable technologies. Amazon is striving to compete in this emerging field alongside smartphones.
Considering a Dual Product Strategy
The Light Phone has partially inspired Amazon with its minimalist concept—this is a $700 basic device that offers camera, mapping, and scheduling functions but excludes app stores and web browsing. A simplified product would allow Amazon to position the Transformer as a secondary device for consumers looking to reduce digital engagement or for parents wishing to provide age-appropriate technology to teenagers without exposing them to social platforms.
According to Counterpoint Research, basic phones and minimalist phones are expected to account for about 15% of global phone transactions by 2025.
Amazon has yet to begin discussions.