Over a decade ago, Amazon launched the Fire Phone. It flopped so badly the company took a $170 million write-down and killed the project within a year. Now, according to Reuters, Amazon is taking another shot at smartphones with a device codenamed "Transformer."
The new phone will put Alexa at the center of the experience, though the report notes that Alexa won't "necessarily be the primary operating system." That's a telling distinction. Amazon seems to have learned from the Fire Phone era that building an entire mobile OS from scratch is a losing bet against Android and iOS. The smarter play is treating Alexa as a layer on top of an existing platform, likely Android, rather than trying to replace the whole stack.
The timing makes sense. Alexa has been through a rough stretch. Amazon reportedly lost $25 billion on the Alexa division over several years, and the assistant's reputation as a smart speaker that mostly sets timers and plays music has been hard to shake. But with the current wave of AI assistants getting genuinely useful at tasks like scheduling, research, and managing workflows, Amazon has a reason to try again. A phone built around an AI assistant in 2026 is a fundamentally different product than a phone built around a shopping ecosystem in 2014.
The big question is distribution. The Fire Phone was an AT&T exclusive at $199, competing head-on with the iPhone. Amazon has historically done better when it undercuts the market on price, as it did with Kindle and Fire tablets. A $100-200 Alexa phone sold directly through Amazon, positioned as a smart assistant that happens to make calls, would be a very different competitive proposition than another premium smartphone.
No launch timeline has been confirmed. The device is reportedly still in early development within Amazon's Lab126 hardware division, the same team behind Echo, Kindle, and the original Fire Phone.