Amazon devices chief says a new smartphone is “just not the goal”

In March, Reuters reported that Amazon was developing a new smartphone. Citing four anonymous “people familiar with the matter,” the publication said that Amazon was exploring using Alexa as an operating system and developing the phone, codenamed Transformer, to push people to use Amazon’s AI and other services. At the time, the sources said that Transformer could still be canceled, and Amazon declined to comment on the report to Ars Technica.

In an interview published on the Financial Times (FT) today, Panos Panay, Amazon’s head of devices and services, said building a new phone isn’t Amazon’s goal.

The company already tried selling a smartphone in 2014, but it discontinued the Fire Phone about a year later following poor sales.

FT reporter Rafe Rosner-Uddin asked Panay, who was behind Microsoft’s failed Surface Duo phone, whether Amazon is interested in releasing a new AI-focused phone.

“Here’s what I’d say: it’s just not the goal. I know there’s a lot of rumors out there,” Panay responded.

Panay said Amazon is not “necessarily” trying to create a new phone.

He added:

There’s no clear path that makes sense… there’s so many new form factors that are important that need to be focused on. It’s a tricky question. If I black-and-white say no, I would say that was accurate. But I also think it’s misleading.

Amazon’s devices chief pointed to the importance of making “a big bet when you need to,” suggesting that currently, Amazon doesn’t need to release a phone.

“What I won’t ever do again is [go to the customer and say], ‘Here’s another phone, what do you think?’ There’s no point. We know what customers need right now,” Panay said.

Releasing a new smartphone would be a huge risk for Amazon. For one, it would put the company in direct competition with smartphone juggernauts Apple and Samsung. It would also mark a return to a market where Amazon has already failed once.

Additionally, Amazon’s devices business has been struggling to turn a profit for years. In 2024, The Wall Street Journal reported that Amazon’s devices unit lost $25 billion from 2017 to 2021. In 2022, Business Insider reported that Alexa would lose $10 billion that year. A new smartphone would be a huge risk for a department understood to be facing extreme pressure to finally prove its value.

When asked if Amazon CEO Andy Jassy tasked him with driving profitability in Amazon’s devices unit, Panay said he’s been asked to make “sure we think of devices as one of the next big businesses of Amazon.” Achieving that goal includes driving device usage and getting Amazon device owners to use Amazon services, like Amazon Music and Amazon shopping, he said.

“We want our business to be profitable. I can say that clearly,” Panay told FT.