Amazon Is Building a New AI Smartphone. Here's Everything We Know. Live Updates

Amazon is quietly building a new smartphone. According to an exclusive Reuters report published March 20, 2026, the company has been developing a device internally known as "Transformer" inside its Devices and Services division. This is Amazon's first serious smartphone effort since the Fire Phone, which collapsed spectacularly in 2014.

The timing is no accident. Amazon has been pouring money into artificial intelligence at a staggering rate. TechCrunch reports the company is projecting $200 billion in capital expenditures toward AI, chips, and robotics in 2026 alone. A smartphone designed around AI would be the most personal way to put that investment directly in consumers' hands.

What Is Amazon's New Smartphone, "Transformer"?

The smartphone is being developed within a relatively new unit inside Amazon's Devices division called ZeroOne. The team is led by J Allard, a former Microsoft executive who helped create both the Xbox gaming console and the Zune music player.

ZeroOne's mandate is to create "breakthrough" gadgets. Allard works under Panos Panay, another former Microsoft veteran who now leads Amazon's broader devices and services organization. Both men know what it takes to launch consumer hardware. Whether that experience translates to a winning smartphone remains the question.

Amazon's effort to develop a new smartphone had not been previously reported before Reuters' exclusive. Key details such as the anticipated price, the revenue Amazon hopes to generate, or the exact financial commitment behind the project remain unknown.

"The phone is seen as a potential mobile personalization device that can sync with home voice assistant Alexa and serve as a conduit to Amazon customers throughout the day."

Reuters, March 20, 2026

Alexa and AI Features at the Core of the Device

Alexa is not just one feature on this phone. It is the entire point. AI features are a big focus for the smartphone, which is being seen internally as a way to encourage Amazon customers to use its AI products.

Amazon launched a fully revamped Alexa in early 2025. The new Alexa+ is infused with generative AI to be more capable, conversational, and agentic than the previous version, though its development was plagued by delays reportedly due to hallucinations and wrong answers during testing.

A key focus of the Transformer phone is AI integration that could eliminate the need for traditional app stores entirely. The vision is less scrolling through apps and more simply asking Alexa to get things done. That is a dramatic rethinking of how we interact with our phones.

Amazon's Ecosystem: Shopping, Prime Video, Music and More

The phone is envisioned as an AI-driven mobile personalization device that syncs with Alexa and serves as a persistent connection to Amazon's ecosystem, including shopping, Prime Video, Prime Music, and food delivery through partners like Grubhub.

Personalized features aimed at making it easier to use Amazon's suite of apps are a central design goal. Amazon wants this phone to be the place you shop, stream, eat, and chat without ever leaving its walled garden.

A Minimalist "Dumbphone" Version Could Also Launch

Not everyone needs or wants a full-featured smartphone. Amazon appears to know this. According to Reuters, the company has explored both a conventional smartphone and a stripped-down device with limited features, aimed at countering screen addiction.

One inspiration for the new phone has been the Light Phone, a $700 minimalist smartphone with a camera, map, calendar, and very little else. A stripped-down device could also help Amazon market it as a potential second handset alongside iPhones and Samsung Galaxies already in customers' pockets.

Such handsets accounted for 15% of global handset sales in 2025, according to Counterpoint Research. That is a meaningful slice of the market and a far less crowded competitive lane than flagship smartphones.

The Fire Phone Disaster: What Went Wrong in 2014

To understand why this news matters, you have to go back to 2014. Amazon burned badly with the Fire Phone. The device, personally overseen by Jeff Bezos, lasted barely over a year before Amazon pulled the plug and wrote off $170 million in unsold inventory.

About three months after launch, Amazon cut the price of a $199 model to just 99 cents due to sluggish sales. The Fire Phone was discontinued after a little over a year. It lacked popular apps and failed to convince consumers to ditch their Apple and Android devices.

The original Fire Phone launched with four front-facing cameras capable of taking 3D images, and some on-screen objects appeared in three dimensions. The phone almost immediately flopped.

How "Transformer" Is Different From the Fire Phone

Can Amazon Compete with Apple and Samsung?

This is the hardest question Amazon faces. The Fire Phone failed because it lacked popular apps and gave people no compelling reason to ditch their iPhones or Android devices. Amazon faces the same challenge now, with Apple and Samsung still controlling roughly 40% of global smartphone sales between them.

Breaking that loyalty is not easy. Apple and Google have spent two decades making their ecosystems sticky. But Amazon is not starting from nothing. It has one of the world's largest e-commerce platforms, 200 million Prime subscribers globally, a dominant cloud business in AWS, and a genuinely capable AI assistant in Alexa+.

The Smartphone Market Amazon Is Entering Right Now

Counterpoint Research is forecasting a 12.4% year-over-year decline in global smartphone shipments for 2026, the sharpest annual contraction ever, driven largely by memory shortages pushing up device costs. A contracting market makes it harder to win new customers but potentially easier to position a disruptive entrant.

Amazon is not alone in chasing an AI-native device. OpenAI is working with former Apple design chief Jony Ive on several hardware prototypes, while Apple, Google, and Meta are developing AI-embedded glasses, watches, and headphones. The race for the post-app-store device is well and truly on.

Key Unknowns: Price, Timeline, and Whether It Launches at All

There are still big gaps in what we know. Reuters could not determine the anticipated price of the phone, the revenue Amazon hopes to generate, or the financial commitment Amazon has made to the project. The project's timeline also remains undefined.

The company has not started talks with wireless carriers yet. Sources told Reuters the project could still be canceled. Amazon declined to comment in response to every major outlet that reached out.

"The initiative is the newest chapter in a years-long effort to bring to market Bezos' long-held vision of a ubiquitous voice-driven computing assistant akin to the voice-controlled computer in Star Trek."

Reuters, March 20, 2026

What This Means for Amazon Customers

If Transformer ships, Amazon Prime members could be its primary audience. A phone that surfaces deals the moment you open an app, streams Prime Video seamlessly, routes food orders through Grubhub, and answers every question through Alexa would be deeply convenient for people already living inside Amazon's world.

In 2014, convenience was not enough. But in 2026, with AI as the differentiator rather than a 3D camera gimmick, the answer might genuinely be different. Amazon has the data. It has the money. It has the team. Now it needs the device.

We will update this article as more information becomes available. Bookmark this page for the latest developments on Amazon's Transformer smartphone.