Amazon Allegedly Secretly Developing Smartphone to Rewrite App Store Rules with AI

Latest reports indicate that tech giant Amazon plans to launch a brand-new smartphone for the first time in over a decade, but the project is still in its early stages.

Four insiders revealed that Amazon’s Devices and Services division is developing a new project called “Transformer.” They said this phone is seen as a potential personalized mobile device that can sync with the home voice assistant Alexa and provide 24/7 services to Amazon users.

This project is the latest step in Amazon’s long-standing effort to realize Jeff Bezos’s vision — creating an omnipresent, voice-driven computing assistant similar to the voice-controlled computer in the sci-fi movie “Star Trek.”

Insiders disclosed that the envisioned personalized features of this phone would make activities like shopping on Amazon, watching Prime Video, listening to Prime Music, and ordering food through partners like Grubhub incredibly convenient.

Bezos’s idea centers on shopping, leveraging Prime membership benefits such as fast delivery and discounts to compete with Apple. At the same time, Amazon could gather extensive user data, including usage behavior, purchase history, and content preferences.

It should be noted that details about the “Transformer” project remain unclear. Insiders warned that if strategic priorities shift or financial pressures increase, the project could be canceled.

Sources said that a major focus of the project is to deeply integrate artificial intelligence (AI) capabilities into the device, potentially eliminating reliance on traditional app stores — users might access services without downloading or registering apps. Alexa is expected to be one of the core features, but it may not be the primary operating system of the phone.

In fact, the development history of AI hardware in recent years has been rocky, with products like Humane AI Pin and Rabbit R1 attempting to offer generative AI services without logging into a computer or phone, but they were discontinued due to poor reviews.

Nevertheless, the tech industry continues to explore “AI-native devices,” trying to move away from app-centric smartphone interaction models. OpenAI is developing multiple hardware prototypes, and Apple, Google, and Meta are working on new devices like AI-integrated glasses, watches, and earbuds.

Although Amazon’s AWS dominates the global cloud infrastructure market, the company has been considered slow in AI application development, lagging significantly behind competitors.

After years of AI-driven transformation, Alexa was re-launched in 2025 and is viewed internally as key to Amazon’s future consumer services. The new phone is seen as another attempt to encourage users to engage more with AI on devices or through Alexa.

Lessons from the Fire Phone

When Amazon first entered the smartphone market in 2014, it introduced several unique features, such as a camera-based shopping tool that could recognize products and find them on Amazon’s website to add to the cart.

However, Fire Phone’s proprietary operating system, Fire OS, lacked popular apps available on Android and iOS app stores. Its complex multi-camera 3D display system consumed a lot of power, and the device often overheated.

Amazon offered a one-year free Prime membership with the Fire Phone, but sales were disappointing. The company later slashed the unlocked version’s price from $649 to $159, and the device was discontinued 14 months after launch, with a $170 million write-down on unsold inventory.

R.W. Baird analyst Colin Sebastian stated that although Amazon failed with smartphones, it doesn’t mean they can’t try again, but the challenge remains significant.

He said, “Amazon needs to give consumers a compelling reason to upgrade their phones. People are heavily dependent on existing app stores.”

Like over a decade ago, Amazon still faces fierce competition from market leaders Apple and Samsung. According to Counterpoint Research, these two companies held about 40% of the global market share last year.

(Source: Cailian Press)