When Reuters reported Friday that Amazon is working on a new smartphone, the reflexive reaction was obvious: Didn’t they already try this? And didn’t it go spectacularly badly?
Yes, on both counts. The Fire Phone, which launched in 2014 when Jeff Bezos was still running the company, lasted 14 months and led to a $170 million writedown.
It was packed with gimmicks, including a 3D display and a camera feature that recognized products and let you buy them on Amazon. It might have been the biggest example of Amazon failing to live up to its legendary mantra of starting with the customer and working backwards.
But dismissing Amazon’s new effort, codenamed “Transformer,” as a sequel to that disaster misses the point. This isn’t Amazon trying to redo 2014. It’s Amazon looking at the AI landscape and betting that the shift to AI is going to fundamentally change what a mobile device is, and that the dominant smartphone makers might not be the ones leading that charge.
Apple and Samsung together command about 40% of global smartphone sales, but their recent devices have been incremental upgrades, not breakthroughs. Neither company is at the forefront of AI in the way that OpenAI, Anthropic, Microsoft, and Amazon itself are.
A growing number of companies are already trying to exploit that gap. OpenAI is working with former Apple design chief Jony Ive on a dedicated AI device. Meta is pushing its Ray-Ban smart glasses as an alternative to pulling out your phone.
Earlier attempts at standalone AI gadgets, like the Humane AI Pin and Rabbit R1, rivaled the Fire Phone as flops in their own right, but they demonstrated the potential of AI devices.
That’s where Amazon may see an opening.
The project is under ZeroOne, a year-old group within Amazon’s devices unit with a mandate to create “breakthrough” gadgets, according to Reuters. It’s headed by J Allard, the former Microsoft executive behind Xbox and the Zune music player, who joined Amazon in 2024, as GeekWire first reported.
The phone is envisioned as an AI-driven personalization device that syncs with Alexa and could potentially bypass traditional app stores altogether. That vision would have been science fiction a few years ago, but it feels increasingly plausible in an era when AI agents can act on a user’s behalf without opening an app.
The company, for the record, isn’t commenting on any of this. The project is still early, the timeline is undefined, and Reuters noted that it could still be scrapped.
Amazon hasn’t even approached wireless carriers yet, according to the report.
But that detail actually raises an interesting question. Amazon’s Leo satellite internet initiative, formerly known as Project Kuiper, sits in the same Devices & Services division as the new phone project, all under the umbrella of Panos Panay, another former Microsoft executive. Those satellites could provide wireless connectivity directly to devices, potentially bypassing traditional carriers altogether.
There’s no indication the two efforts are connected, but it would make a ton of sense.
And then there’s Amazon Sidewalk, the company’s existing mesh networking protocol that uses Echo and Ring devices to create a low-bandwidth wireless network.
Between satellites overhead and Sidewalk on the ground, Amazon has been quietly building out the infrastructure that could support a device like this without ever involving a traditional carrier.
For the new phone project, Amazon has explored both a conventional smartphone and a stripped-down “dumbphone” with limited features, according to the Reuters report. It has considered positioning a simpler version as a companion device that customers would carry alongside their existing iPhone or Galaxy. One inspiration is reportedly the Light Phone, a minimalist handset with a camera, maps, and not much else, selling for about $700.
During the original Fire Phone development, two internal teams debated the direction: a low-cost, stripped-down device vs. a high-end phone packed with features, as noted in a great “Version History” podcast by The Verge. Bezos sided with the high-end camp, and it failed.
This time, Amazon appears to be hedging by exploring both paths simultaneously.
It’s also worth reconsidering the conventional wisdom that this kind of hardware bet is out of character for Amazon under CEO Andy Jassy, Bezos’ successor. Jassy has spent much of his tenure streamlining the company and cutting projects that weren’t working.
But the goal of that effort isn’t to avoid big bets, it’s to clear out bureaucracy and make Amazon more nimble and deliberate when it makes them. Creating a dedicated hardware group with a “breakthrough” mandate and staffing it with a veteran product leader is evidence of that.
Ultimately, the fact that Amazon is willing to revisit its most painful hardware failure shows how seriously it takes the idea that AI has the potential to change what a mobile device can be.
This piece was adapted from a discussion between Todd Bishop and John Cook on this week’s GeekWire Podcast. Listen above, or subscribe in Apple, Spotify or wherever you listen.
