Amazon Deprioritizes Phone as Rivals Push Innovation

Amazon devices head Panos Panay told the Financial Times that launching a new smartphone is "just not the goal," pushing back on Reuters’ earlier report that the company was developing an Alexa-centered phone codenamed Transformer. Panay — who previously worked on Microsoft’s Surface Duo — said Amazon is not necessarily aiming to create a phone now, citing unclear business rationale and many emerging form factors. He warned against repeating mistakes of the Fire Phone flop and emphasized the need to prioritize bets that grow device usage and services revenue. The devices unit has long struggled with profitability, and Panay said he’s focused on making devices a larger, profitable part of Amazon’s business.

Amazon devices chief Panos Panay told the Financial Times that building a new smartphone is “just not the goal,” downplaying Reuters’ March report that Amazon was developing a phone codenamed Transformer to run Alexa as an operating system and push Amazon services. Reuters had cited anonymous sources saying the project was exploratory and could be canceled; Amazon previously launched the Fire Phone in 2014 but discontinued it after poor sales. Panay’s remarks signal Amazon is unlikely to re-enter the smartphone hardware market soon, instead focusing on other devices and services where Alexa and Amazon’s ecosystem can grow without the risks of a full phone launch.