Amazon bets the phone is still the future

THE LAST TIME Amazon tried to make a smartphone, it sold fewer than 35,000 units in its first twenty days and forced the company to swallow a $170 million write-down. The Fire Phone, launched in 2014 with a gimmicky 3D display and a barcode scanner designed to funnel users toward Amazon's checkout page, became shorthand for the kind of hubris that happens when a company builds a product for its CEO rather than its customers. Eleven years later, Amazon is trying again — and the timing could not be more revealing.

Reuters reported this week that Amazon is developing a new smartphone, codenamed "Transformer," inside a unit called ZeroOne, led by J Allard, the former Microsoft executive who helped create the Xbox. The device will be built around Alexa and designed to push users deeper into Amazon's ecosystem of shopping, streaming, and AI services. The company, which is projecting $200 billion in capital expenditures for 2026 across AI, chips, and robotics, declined to comment.

What makes this interesting is not the phone itself — it is the implied thesis. Amazon is making a bet that the smartphone remains the dominant computing platform for the foreseeable future. That thesis, hitherto uncontroversial, is now being challenged from every direction.