Amazon Is Building a New Smartphone Codenamed 'Transformer' After Fire Phone Disaster

Amazon is reportedly developing a new smartphone more than a decade after the spectacular failure of its Fire Phone, according to Reuters. The project, internally codenamed "Transformer," represents Amazon's second attempt at cracking the smartphone market — this time with artificial intelligence at the center of the strategy.

Project Transformer

The new phone is being developed within a year-old group called ZeroOne, whose mandate is to create "breakthrough" gadgets. The team is led by J Allard, a former Microsoft executive who was instrumental in creating the Xbox gaming console and the Zune music player.

Unlike the Fire Phone, which tried to compete head-on with the iPhone using gimmicks like 3D face-tracking, Transformer is reportedly focused on AI integration. The phone would serve as a mobile personalization device that syncs with Alexa and acts as a conduit to Amazon services throughout the day.

AI-First Approach

A key focus of Transformer is integrating AI capabilities that could potentially eliminate the need for traditional app stores. Alexa would likely be a core feature but not necessarily the primary operating system. The phone's personalization features would make buying from Amazon.com, watching Prime Video, listening to Prime Music, or ordering food from partners like Grubhub easier than on any other device.

Risky Timing

The timing couldn't be worse for a new smartphone launch. According to IDC analysts, smartphone shipments are headed for their biggest decline ever in 2026, expected to plunge 13% as surging memory chip prices drive up device costs.

Amazon itself has acknowledged the uncertainty — sources caution the project could be scrapped if strategy shifts or financial concerns arise. The company famously wrote off the Fire Phone as a $170 million loss in 2014.

The Bottom Line

Amazon making another phone is the tech equivalent of the guy who got food poisoning at a restaurant going back for seconds. The Fire Phone was one of the biggest hardware flops in tech history, and the smartphone market is shrinking. But if anyone can make an AI-first phone work, it might be the company that already has Alexa in 500 million homes. The real question: will Transformer actually transform anything, or will it join the Fire Phone in the graveyard of Amazon gadgets nobody asked for?