Amazon Wants to Make a Phone Again, Because Apparently the Fire Phone Wasn't Painful Enough

Project Transformer: A Bold Name for a Very Risky Bet

Amazon, the company that brought you a smartphone so unwanted it went from $199 to 99 cents in six weeks, reportedly fancies another crack at the mobile market. According to a Reuters exclusive, the retail giant is developing a new AI-powered handset codenamed 'Transformer' through an internal team called ZeroOne. Because nothing says "we've learned from our mistakes" quite like giving your secret phone project the most dramatic name imaginable.

Who's Behind the Wheel?

The ZeroOne team is led by J Allard, a former Microsoft veteran of 19 years who co-created the Xbox and also had a hand in the Zune and the ill-fated Kin phone. Allard reports to Panos Panay, the ex-Microsoft Surface chief who jumped ship to Amazon in 2023 to run its devices and services division. Teams are spread across Seattle, San Francisco, and Sunnyvale, having been formally assembled by May 2025.

On paper, that's a solid leadership lineup. In practice, one of those executives helped build the Xbox (brilliant) and the Zune (less brilliant). The track record is, shall we say, mixed.

The Fire Phone: A Quick History Lesson in Humility

For anyone who has mercifully forgotten, Amazon launched the Fire Phone on 25 July 2014. It sold roughly 35,000 units in its first 20 days, capturing a jaw-dropping 0.02% of the US and Canadian smartphone market. The unsubsidised price tumbled from $650 to $160. Amazon took a $170 million write-down in Q3 2014, including $83 million in unsold inventory gathering dust in warehouses. Production was quietly killed by August 2015, just 14 months after launch.

The core problem? Amazon tried to out-feature the iPhone with gimmicks like Dynamic Perspective (a 3D effect nobody asked for) while running Fire OS, which lacked the apps people actually wanted. It was a masterclass in misreading the market.

Why the Timing Could Not Be Worse

Here's where it gets particularly spicy. The global smartphone market is forecast to decline 12.9% year-on-year in 2026, dropping to 1.12 billion units according to IDC. That's the sharpest fall on record, driven largely by memory chip shortages as Meta, Google, and Microsoft hoover up supply for AI infrastructure. Meanwhile, the average selling price of a smartphone is projected to climb 14% to a record $523.

So Amazon wants to enter a shrinking market where devices are getting more expensive to build. Brave, or foolish? Possibly both.

The Dumbphone Angle Is Actually Interesting

The one genuinely intriguing detail is that Amazon is reportedly exploring two approaches: a traditional smartphone and a minimalist 'dumbphone' inspired by the Light Phone. If there's a smart play here, this is it. The digital detox movement has real momentum, and a stripped-back, AI-first device that handles essentials without the doom-scrolling could find an audience that Samsung and Apple are ignoring.

That said, Reuters could not confirm pricing, revenue targets, or any financial commitment. Sources cautioned the project could still be scrapped entirely. Amazon has not commented.

Should UK Readers Care?

Not yet. There has been zero mention of UK availability or pricing. Given that the original Fire Phone launched as an AT&T exclusive in the States and barely made it across the Atlantic, British consumers should probably keep their wallets firmly shut for now. If you're in the market for a new phone today, this is not the one to wait for.

The Verdict

Amazon has the resources to attempt almost anything, but resources alone did not save the Fire Phone. The smartphone market is brutal, mature, and actively contracting. The minimalist device concept has legs, but a full-blown smartphone competitor launching into a 13% market decline feels like a solution looking for a problem. We'll believe it when we see it on a shelf.

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