Amazon Plans AI Smartphone Comeback Centered Around Alexa [Report]

Amazon is taking another shot at the smartphone market. More than a decade after the failure of the Fire Phone, the retail giant is quietly developing a new AI-focused handset designed to put Alexa at the center of the mobile experience.



Operating under the internal codename "Transformer," the device is taking shape within Amazon's hardware division. Reuters reports the effort is overseen by devices chief Panos Panay and led by former Microsoft executive J Allard. The group, known internally as ZeroOne, is tasked with building hardware that could reduce or eliminate reliance on traditional app stores. Instead of downloading apps, users would rely on generative AI to handle tasks like ordering food, streaming video, and shopping on Amazon. The device is described internally as a personalized mobile companion designed to sync closely with Alexa and Amazon services throughout the day.


Development is still in the early stages, and the hardware could take multiple forms. Amazon is exploring a standard smartphone to compete directly with modern flagships, but the company is also weighing a minimalist "dumbphone" approach. Inspired by stripped-down hardware like the Light Phone, this version would offer just the basics—like a camera, calendar, and map. By focusing on reduced screen time, Amazon could position it as a secondary handset for users who already carry an iPhone.

Breaking into the mobile space presents a major hurdle. Amazon's 2014 Fire Phone was a costly misstep, ending in a $170 million write-down after buyers rejected its proprietary OS and battery-draining 3D camera system. The market is even tougher now. Apple recently took the top spot globally for smartphone shipments, leaving little room for newcomers. Meanwhile, analysts expect shipments to drop 13 percent this year as memory costs rise and squeeze margins.

The tech sector is increasingly focused on AI-first hardware. Early attempts to replace smartphone screens with AI gadgets, like the Humane AI Pin and Rabbit R1, failed to gain traction and were discontinued after poor reviews. But the major players are pressing forward. Apple, Google, and Meta are developing AI-powered glasses and other devices, while OpenAI is currently working on a secretive new device with former Apple design chief Jony Ive. For Amazon, putting dedicated hardware into users' hands may be another attempt to accelerate Alexa usage and keep it central to the company's consumer strategy.