Amazon is keeping the tech world guessing about whether it's ready for another shot at smartphones. The company's devices chief Panos Panay just gave his most revealing—and most evasive—comments yet about the rumored Alexa-powered AI phone codenamed "Transformer." Speaking to the Financial Times, Panay refused to flatly deny the smartphone speculation, instead offering carefully parsed non-answers that suggest Amazon's hardware ambitions might extend beyond Echo speakers and Fire tablets. It's a striking shift for a company that spectacularly crashed and burned with the Fire Phone back in 2014.
Amazon might be plotting its return to smartphones, but don't expect the company to confirm it anytime soon. Panos Panay, who leads Amazon's devices and services division, just delivered a masterclass in corporate ambiguity when pressed about whether the e-commerce giant is developing a new phone.
"It's just not the goal," Panay told the Financial Times in an interview published this week. "I know there's a lot of rumors out there." But when asked point-blank if Amazon is going after a phone, he refused to simply say no. "I think your black and white question is, are you going after a phone? A lot of people want me to say no, but a lot..." he trailed off, according to The Verge's reporting on the interview.
The cryptic comments land just weeks after reports surfaced that Amazon is quietly developing an Alexa-powered AI smartphone with the internal codename "Transformer." The device would reportedly lean heavily on artificial intelligence and voice interaction, potentially positioning it as something fundamentally different from traditional smartphones dominated by Apple and Samsung.
For Amazon, even entertaining the idea of another phone represents a remarkable willingness to revisit past trauma. The company's Fire Phone launch in 2014 stands as one of tech's most spectacular product failures. Priced at $199 with a two-year AT&T contract and featuring gimmicky 3D effects, the device bombed so badly that Amazon took a $170 million write-down on unsold inventory just months after launch. The company eventually slashed the price to 99 cents and effectively abandoned the smartphone market.
But Panay, who joined Amazon in 2023 after leading Microsoft's Surface division, brings a different perspective to hardware development. At Microsoft, he oversaw the transformation of Surface from a risky bet into a multi-billion dollar business. His track record suggests he's not interested in simply copying existing smartphone playbooks.
The timing of Amazon's renewed interest in mobile hardware makes strategic sense. AI assistants are rapidly evolving from simple voice commands to sophisticated conversational interfaces. Google just integrated its Gemini AI deeply into Android, while Apple is reportedly prepping major AI features for iOS. An AI-first phone built around Alexa could theoretically offer something distinctive in an otherwise commoditized smartphone market.
Amazon also has unique advantages other phone makers lack. The company controls a massive e-commerce platform, a growing advertising business, and Prime membership that could subsidize hardware costs. Unlike the Fire Phone era, Amazon now has years of experience building consumer hardware people actually want—Echo devices have sold in the hundreds of millions.
Still, the smartphone market has only gotten more brutal since 2014. Apple and Samsung command the premium segment, while Chinese manufacturers like Xiaomi and Oppo dominate the mid-range. Breaking through that duopoly requires either revolutionary technology or a completely different approach to what a phone should be.
Panay's careful word choice suggests Amazon might be exploring the latter. Rather than building a traditional smartphone that competes directly with iPhone, the company could be developing an AI-centric device that reimagines mobile computing around voice and automation. Think less iPhone competitor, more ambient computing device that happens to fit in your pocket.
The "Transformer" codename itself hints at something that might shift between different modes or form factors. Amazon has already experimented with devices that blur category lines—the Echo Show combines smart speaker and tablet, while Fire TV integrates streaming and Alexa.
Industry analysts remain skeptical. Amazon's previous attempts to expand beyond its core e-commerce and cloud businesses have produced mixed results. Fire tablets succeed mainly as cheap content consumption devices. Fire TV competes but doesn't dominate. The Fire Phone failed entirely. Only Echo devices have broken through to become category-defining products.
What happens next likely depends on whether Amazon can articulate a compelling reason for a phone to exist beyond "Alexa in your pocket." The company needs to answer what problem this device solves that current smartphones don't, especially as AI features rapidly spread across iOS and Android.
For now, Panay is keeping his cards close. His non-denial denial suggests internal discussions are ongoing, but Amazon hasn't committed to actually shipping a phone. The company may be in the prototype phase, testing whether an AI-first mobile device can offer enough differentiation to justify the enormous investment required to compete in smartphones.
Amazon's smartphone ambitions remain deliberately murky, but Panay's refusal to shut down the speculation outright tells you everything you need to know. The company is at minimum exploring what an AI-first phone could look like, even if it hasn't greenlit production. Whether that exploration leads to an actual product depends on Amazon solving the fundamental question that killed the Fire Phone: why would anyone choose an Amazon phone over an iPhone or Galaxy? Until Panay can answer that convincingly, expect more cryptic non-answers and strategic ambiguity.
