Amazon Plans New Smartphone After Fire Phone Failure

Amazon is developing a new smartphone, nearly a decade after its first attempt failed.

The original Fire Phone, launched in 2014 at $649, did not gain traction. Its features, including a 3D “Dynamic Perspective” display and a camera-based shopping tool called Firefly, failed to attract users.

Limited app availability on its proprietary Fire OS made matters worse. Amazon eventually cut the price to $159, discontinued the device after 14 months, and recorded a $170 million writedown for unsold inventory.

Per Reuters, the new phone, internally known as “Transformer,” is being built by Amazon’s devices unit. The project is led by ZeroOne, a group created last year to produce “breakthrough” gadgets.

ZeroOne is headed by J Allard, a former Microsoft executive involved in the Zune and Xbox. Panos Panay, head of Amazon’s devices and services unit, has been overseeing the company’s focus on toward more profitable hardware, including upcoming Android-based tablets.

Sources familiar with the project say the Transformer could serve as a personalised device connected to Amazon’s services. It may integrate Alexa and allow seamless access to Prime Video, Prime Music, and food delivery partners.

The phone is still in development. Amazon has considered both a full-featured smartphone and a “dumbphone” with limited functions to reduce screen time.

This comes as the global smartphone market faces several challenges. International Data Corporation expects shipments to fall sharply in 2026, with surging memory chip prices driving up costs.

Apple and Samsung are still leading, controlling roughly 40% of global sales last year. Analysts say new entrants will find it difficult to take market share.

The Transformer also joins a crowded field of AI-native devices. Previous attempts, such as the Humane AI Pin and Rabbit R1, embedded AI directly into hardware but failed after poor reviews and limited adoption.

OpenAI, meanwhile, is working with former Apple design chief Jony Ive on AI hardware prototypes expected no earlier than 2026.

Colin Sebastian, an analyst at R.W. Baird, said, “Amazon will have to give consumers a compelling reason to switch phones and people are pretty attached to the existing app stores.”

Amazon has not disclosed pricing or release plans for the Transformer. A company spokesperson declined to comment.

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