Amazon is making an Alexa phone

Amazon is returning to the smartphone game. More than a decade after the catastrophic failure of the Fire Phone, the e-commerce giant is experimenting with mobile devices again — this time placing artificial intelligence as the main axis of development. A project codenamed "Transformer" could change the way we think about the relationship between an AI assistant and the device that runs it. But the Fire Phone's history serves as a clear warning: technological ambitions must be tempered by a real understanding of user needs.

What Amazon is planning is not a simple return to past mistakes. Instead, the ZeroOne team under the leadership of J Allard — a Microsoft legend known for work on Zune and Xbox — is building something fundamentally different. The project explores both conventional smartphones and minimalist devices, drawing inspiration from the success of Light Phone, which proved that there is a market for phones without an overwhelming app ecosystem. This signals that Amazon has learned lessons from the past.

Why Amazon Won't Give Up on Smartphones

Amazon's decision to return to the smartphone segment may seem strange given Apple and Android's dominance. However, the strategy makes sense when you look at the company's position in the AI ecosystem. Amazon is investing billions of dollars in artificial intelligence development, competing with OpenAI, Anthropic, and Google. Alexa, once revolutionary, has lost relevance in the era of large language models. A mobile device would be a natural place to redefine the role of an assistant in the user's daily life.

A smartphone is the most intimate technological device — always with us, always on, always ready to interact. It's an ideal platform for AI that should be ubiquitous and instantaneous. While Alexa in smart speakers waits for voice activation, AI on a phone could be proactive — suggesting actions, predicting needs, integrating into every aspect of the user's daily life. This is the vision Amazon is trying to realize.

The competition isn't sleeping either. Apple is intensively working on Apple Intelligence, Google has Pixel with Gemini, and Samsung is integrating Galaxy AI. Amazon cannot afford to stay out of this game. Owning its own device gives it control over the entire experience — from hardware to software — which is crucial for deploying advanced AI features without the limitations imposed by other companies' operating systems.

Transformer: Avoiding Fire Phone's Mistakes

The 2014 Fire Phone was an example of how not to make a smartphone. The device was essentially forced Android with Amazon's interface, limited app availability, and features nobody asked for. Dynamic Perspective — eye-tracking technology — sounded modern, but in practice was annoying. The key problem was the ecosystem: without access to popular apps, the phone was simply worse than the competition.

The ZeroOne team has clearly learned this lesson. Instead of building a competitor to full-fledged Android or iOS, "Transformer" is meant to be a device where Alexa — along with all the power of AI — is the main point of interest. But importantly, Alexa won't necessarily be the primary operating system. This means the device will have access to traditional apps, but the interface will be focused on AI interactions.

The Light Phone inspiration is particularly instructive. Light Phone costs $700 and sells well despite — or perhaps because — it is minimalist. It has a black-and-white screen, no app store, and focuses on the essence of communication. This shows that there is a market segment tired of the overwhelming complexity of modern smartphones. Amazon could attack this segment with a completely different approach: rather than minimalism for its own sake, minimalism as a gateway to advanced AI.

Mini Apps Instead of Traditional Store

The Reuters report suggests that Amazon is considering replacing the traditional app store with mini-apps available directly through Alexa. This approach is already being tested by OpenAI in ChatGPT — users can use functionality without downloading full apps. For Amazon, this would be a solution to the problem that killed the Fire Phone.

Mini apps offer several advantages. First, they reduce complexity — the user doesn't have to manage dozens of installed programs. Second, they can be more deeply integrated with the AI assistant, allowing for a more natural interface. If you want to check the weather, instead of opening a separate app, you just ask Alexa. If you want to order food, the assistant can do it directly, without going through the delivery app interface.

However, this approach also has drawbacks. Developers may be reluctant to create mini-apps if they don't have full control over user experience and monetization. Amazon will need to create an attractive ecosystem for creators, otherwise the risk of lacking apps will be the same as with the Fire Phone. Additionally, users accustomed to full-featured apps may find mini-apps limiting.

The Alexa Plus Problem and Public Trust

Here a serious problem emerges for Amazon. Recently, the company forcibly upgraded users to a new, LLM-based Alexa Plus — and the public reaction was very negative. Users complained about an avalanche of ads, slower responses, and generally degraded experience. If people don't trust Alexa on devices they already own, why would they buy a phone where Alexa is the central element?

This is not a minor PR problem — it's a fundamental trust issue. Amazon must not only build a good device but also rebuild the reputation of its AI assistant. The new Alexa Plus is technologically advanced, but if it's flooded with ads and slow, no modern interface will save "Transformer" from the same fate as the Fire Phone.

Amazon has a chance to fix this. If the new phone is positioned as a premium device without ads, with fast, responsive AI and real added value, it could change the narrative around Alexa. But this will require courage — Amazon will have to say "no" to part of its ad revenue to build trust around the device.

Price and Market Positioning

The original Fire Phone started at $199, which was aggressive pricing. However, the device was weak, and people quickly noticed. "Transformer" cannot make this mistake. If Amazon wants to compete in the premium market — a segment where people actually spend money on new technology — the device must be truly good.

The Light Phone inspiration suggests that Amazon is considering positioning in the higher price tier. Light Phone costs $700, and people buy it. If "Transformer" costs between $500 and $800, but offers real AI advantage — deep integration with Amazon's ecosystem, better context understanding, proactive suggestions — it could be convincing for early adopters.

However, price alone cannot be the only argument. The device must perform better than the competition in key areas. If it's faster at processing AI commands, if it's more intuitive, if it integrates with Amazon Prime, Music, Video, and other services in a way competitors cannot replicate — then it might have a chance.

The Role of J Allard and the ZeroOne Team

J Allard is not a random person to lead this project. His history at Microsoft — work on Zune and Xbox — shows that he understands both failures and successes in consumer hardware. Zune was a failure, but Xbox changed the industry. Allard knows what works and what doesn't. The fact that Amazon entrusted him with this project suggests the company is taking it seriously.

ZeroOne is an innovative group within Amazon, not directly connected to the main business. This gives it some freedom — it can experiment without the pressure of generating immediate profits. However, this same independence can be a problem if ZeroOne is not sufficiently integrated with the rest of the company. The success of "Transformer" will depend on whether Amazon can coordinate its resources — from manufacturing, through marketing, to service integration.

History shows that innovative teams can create wonderful prototypes, but bringing a product to market is a completely different story. Amazon must ensure that ZeroOne is not isolated but has access to the company's entire infrastructure.

Does the Alexa Smartphone Have a Chance?

The question is: will Amazon actually release "Transformer" to the market, or is this another project that will never see the light of day? History suggests that Amazon is cautious — the Fire Phone was the company's only major hardware failure in recent years. However, the pressure of AI competition is real. If Amazon doesn't have its own mobile device, it will have to rely on iOS and Android — platforms controlled by competitors.

There is a chance of success, but under certain conditions. First, the device must be technologically advanced and reliable. Second, it must solve the Alexa Plus problem — people must want to use Alexa, not feel forced to. Third, Amazon must find a niche where it can dominate — perhaps not the entire smartphone market, but a segment of users seeking deep AI integration and Amazon services.

Ultimately, "Transformer" is not so much an ordinary smartphone as a test of a hypothesis: can AI be attractive enough for people to buy an entire device around it? The answer will have implications for the entire industry. If Amazon succeeds, other companies will follow. If they fail again, it will mean that smartphones are already too entrenched for a new player to enter with a revolutionary approach. In any case, waiting for details on "Transformer" will be one of the more intriguing technology events in the coming months.