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.
Through the looking glass
But a growing cohort of the industry's heaviest spenders reckons the next era of personal computing will not live in your pocket. It will sit on your nose. Meta sold over seven million pairs of Ray-Ban smart glasses in 2025, tripling the roughly two million it moved in 2023 and 2024 combined, according to EssilorLuxottica's fourth-quarter results. Waitlists for the $799 Ray-Ban Display model — Meta's first consumer glasses with an in-lens screen — stretched deep into 2026, forcing the company to pause its planned international rollout in January. EssilorLuxottica is ramping production to ten million units annually by year's end. Those are not iPhone numbers, but they are no longer a novelty.
Snap, which has spent more than $3 billion over eleven years developing AR glasses, spun off a dedicated subsidiary, Specs Inc., in late January and plans to launch consumer-grade AR glasses later this year. Apple, under project codename N401, is accelerating development of AI-powered smart glasses aimed at a late 2026 or early 2027 release — a move Bloomberg attributed to Tim Cook's determination to beat Meta to true augmented reality. Google committed $150 million to a partnership with Warby Parker for Android XR-equipped smart glasses. And OpenAI, having acquired Jony Ive's hardware startup io for $6.5 billion, has smart glasses on its product roadmap alongside a family of AI devices slated for late 2026.
The convergence is striking. Five of the most formidable companies in technology — plus a fledgling hardware division of the most valuable AI startup on earth — are placing parallel bets that the face, not the hand, is the next platform. Amazon, meanwhile, is placing a parallel bet that those companies are wrong, or at least premature.
There is a case for Amazon's position. The smartphone market moves roughly 1.2 billion units per year. Smart glasses, at their current pace, are a rounding error. Even Meta's breakout 2025 was a fraction of what Apple ships in a single iPhone cycle. Glasses face persistent constraints — battery life, weight, display quality, social stigma — that phones solved a decade ago. And Amazon's actual strategic objective may be less about hardware margins than about ensuring Alexa has a persistent, always-on conduit to the consumer. The company spent more than a year rebuilding its voice assistant with generative AI before launching Alexa+ in February; reception has been mixed, with reviewers praising smarter home controls but flagging hallucinations and half-baked agentic features. A phone could give Alexa+ a surface it currently lacks: a screen in your pocket, tuned to Amazon's services, rather than a speaker on your counter.
Still, Apple's internal teams are reportedly concerned that Siri's AI shortcomings could undermine its own glasses launch — a dynamic that cuts both ways for Amazon. If the smartest companies in the world cannot yet deliver a compelling AI assistant on a pair of spectacles, perhaps it is too early to abandon the phone. But it is also worth noting that Amazon's last phone failed precisely because it offered consumers nothing they could not already get from an iPhone or a Samsung Galaxy, except a more convenient path to Amazon's shopping cart. The question is whether Alexa+, bolstered by the company's massive AI infrastructure spend, can change that equation — or whether "Transformer" will prove to be another case of a company solving its own distribution problem rather than the customer's.
The irony is that the Fire Phone's biggest legacy was not a phone at all. The speech-recognition technology and the engineers who built it were redirected into what became the Echo, the device that put Alexa in tens of millions of homes. If Transformer follows the same arc — a splashy bet that fails to find an audience but seeds something more important — Amazon might not mind. Jeff Bezos once told the Fire Phone's project lead not to lose a minute of sleep over the $170 million write-down. Amazon, it seems, can afford to be wrong about the phone. What it cannot afford is to be absent from whatever comes next. ■
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