Amazon developing new AI-integrated smartphone: report

Amazon is developing a new smartphone within its devices and services unit, more than a decade after its first failed attempt in the category, according to a report by Reuters.

The project, internally dubbed “Transformer,” is being positioned as a personalised mobile device that can integrate with the Alexa voice assistant and act as a continuous touchpoint for Amazon users throughout the day.

However, details such as pricing, timeline and financial commitment remain unclear, and the project could still be shelved if strategic priorities shift.

A second attempt after Fire Phone failure

Amazon’s renewed push comes over ten years after it launched the Fire Phone in 2014, an effort to challenge Apple and Samsung in the smartphone market.

The device was discontinued within a year, becoming one of the company’s most notable product failures.

The new initiative reflects a long-standing vision championed by founder Jeff Bezos to build a voice-first computing platform, similar to the futuristic assistants depicted in science fiction such as Star Trek.

At the time, Amazon had aimed to centre its smartphone experience around shopping, offering Prime-linked benefits and deeper consumer insights.

AI and Alexa at the core of the device

The Transformer project is expected to rely heavily on artificial intelligence to deliver a seamless and personalised user experience.

The device could act as a constant interface between Amazon and its customers, enabling easier access to services such as shopping, streaming and food delivery.

The report added that the phone may reduce reliance on traditional app stores by leveraging AI to perform tasks without requiring users to download separate applications.

While Alexa is expected to be a central feature, it may not function as the device’s primary operating system.

The push into AI-powered hardware comes at a time when several companies are experimenting with alternatives to conventional smartphones.

Recent attempts such as the Humane AI Pin and Rabbit R1 have struggled to gain traction, highlighting the challenges of building viable AI-native devices.

Rising competition in AI and hardware

Amazon’s move also comes as rivals intensify efforts to integrate AI into consumer hardware.

OpenAI is collaborating with former Apple designer Jony Ive on new hardware concepts, while Google and Meta are developing AI-enabled wearables such as smart glasses and headphones.

Although Amazon’s cloud unit remains a leader in infrastructure, the company has faced criticism for lagging in consumer-facing AI applications.

Its voice assistant Alexa underwent a major overhaul before relaunching in 2025 and is seen as central to Amazon’s long-term strategy.

Possible design and configuration of the project

Three people familiar with the Transformer project told the news agency that the device remains under development, with Amazon exploring both a conventional smartphone and a simplified “dumbphone” variant with limited features aimed at reducing screen dependence.

The company has yet to approach wireless carrier partners for the device, they added.

The report also adds that the concept draws inspiration from the Light Phone, a minimalist $700 handset offering only basic functions such as a camera, maps and a calendar, without an app store or web browser.

A feature phone version could also be positioned as a secondary device to complement primary smartphones such as iPhones and Samsung Galaxy models.

Devices in this category, including Light Phone-style handsets and flip phones, accounted for around 15% of global handset sales in 2025, according to Counterpoint Research.

Market challenges remain significant

Analysts caution that breaking into the smartphone market will be difficult.

Colin Sebastian, an analyst at R.W. Baird, said Amazon’s earlier failure in the smartphone market does not rule out another attempt, though he cautioned that the challenge remains significant.

“Amazon will have to give consumers a compelling reason to switch phones and people are pretty attached to the existing app stores,” he said in the Reuters report.

The challenge is compounded by the dominance of Apple and Samsung, which together accounted for roughly 40% of global smartphone shipments last year, according to Counterpoint Research.

The broader market outlook is also weakening.

According to International Data Corporation, global smartphone shipments are expected to decline by 13% in 2026, driven by rising component costs, particularly for memory chips.

Even so, Amazon appears willing to take another shot at redefining mobile computing, betting that advances in AI could succeed where its earlier efforts fell short.