Amazon Developing AI-Powered Smartphone, Codenamed ‘Transformer’ to Challenge Apple and Samsung: Report

San Francisco, March 21: Amazon is reportedly planning a return to the smartphone market more than a decade after discontinuing the Fire Phone. According to a Reuters report citing sources familiar with the matter, the project, internally codenamed "Transformer", is being developed within Amazon’s devices and services unit. The device is envisioned as a mobile personalisation tool designed to integrate deeply with the Alexa voice assistant and the broader Amazon ecosystem.

The initiative marks a renewed attempt to fulfil a long held vision of a ubiquitous, voice driven computing assistant. Unlike traditional smartphones that rely heavily on app stores, the "Transformer" project is said to focus on integrated artificial intelligence. This could potentially allow users to perform tasks such as shopping or streaming Prime Video through direct AI interaction rather than downloading and registering for individual applications. Honor 'Robot Phone' With AI-Powered Built-in Gimbal Unveiled at MWC 2026; Check Details (Videos).

Strategic Shift Toward AI Native Hardware

The development of the new handset is being led by "ZeroOne", a specialised group within Amazon’s devices division tasked with creating breakthrough gadgets. The team is headed by former Microsoft executive J Allard, known for his work on the Xbox and Zune. Under the leadership of Panos Panay, head of devices and services, the unit is working to reverse years of unprofitability by focusing on high utility, AI integrated hardware.

Internal discussions suggest that while Alexa will be a core feature, it may not serve as the primary operating system. Instead, the phone aims to accelerate AI usage by acting as a seamless conduit for Amazon’s services, including Prime Music and food delivery via partners like Grubhub. This move places Amazon in direct competition with other AI native hardware projects currently being explored by OpenAI and Jony Ive.

Exploring "Dumbphone" and Minimalist Concepts

In a notable departure from the high spec focus of the original Fire Phone, Amazon is reportedly exploring various form factors, including a minimalist or dumbphone version. Inspired by devices like the Light Phone, this variant would offer limited features such as a camera, calendar and maps without a web browser or app store. This strategy aims to appeal to consumers seeking to reduce screen addiction or those looking for a secondary device.

Market data from 2025 indicates that feature phones and minimalist handsets accounted for 15% of global sales. By positioning the new device as a potential second handset to accompany an iPhone or Samsung Galaxy, Amazon could bypass the app store barrier that hindered its previous mobile efforts. However, the company has yet to secure wireless carrier partners for the project.

Overcoming the Legacy of the Fire Phone

Amazon’s previous entry into the market in 2014 was a high profile failure that resulted in a USD 170 million write down. The Fire Phone was criticised for its complex 3D interface, poor battery life and a lack of popular third party applications. Analysts caution that while Amazon possesses a powerful ecosystem of commerce and cloud services via AWS, the window for a successful mobile comeback remains small. OpenAI Rumoured To Launch ChatGPT-Powered AI Earbuds Codename ‘Sweetpea’ in September 2026: Report.

The "Transformer" project surfaces at a challenging time for the industry, with global smartphone shipments projected to plunge 13% in 2026 due to rising component costs. Amazon must provide a compelling reason for consumers to switch from established leaders like Apple and Samsung, which currently command 40% of the global market.

(The above story first appeared on LatestLY on Mar 21, 2026 08:48 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).