Amazon is seeking to re-enter the smartphone market for the first time in 10 years since 2014. Reuters first reported that Amazon's smartphone is internally called "Transformer."

The report said Transformer links with Alexa smart devices and features Amazon shopping functions prominently. The price and timeline have not been disclosed. Transformer's development is being handled by an internal Amazon organisation called ZeroOne, the report said. The ZeroOne team is led by J Allard (J 알라드), a former Microsoft executive who led the early Xbox project.

On Amazon's move, market research firm IDC said the timing is the worst.

The Register reported on March 20 that Francisco Jeronimo, IDC vice president for client devices, said it would be difficult for Amazon to make a smartphone that outperforms Apple, Samsung and major Chinese manufacturers. Competing on hardware or existing user experience is a fight it cannot win, he said. IDC forecast the smartphone market will shrink 13 percent in 2026 due to the impact of a memory supply shortage. Jeronimo said it was the worst time to launch a new product.

The ZeroOne team is also developing a dumb version of the phone, the report said. A lightweight phone with only a camera, calling functions and a global positioning system, and no browser, is being cited as one of the reference models. Jeronimo said demand for digital detox is limited to a small minority and actual sales are negligible. He said it is a viable niche for small companies but does not fit a company of Amazon's scale.

Some see a chance if Amazon positions its smartphone as an AI device. Jeronimo said not many companies have commerce, content, cloud, Alexa-based AI and data-driven customer response capabilities, and Amazon could seize an opportunity at that intersection. He added that the window of opportunity is closing as Apple, Google, Samsung and OpenAI are all moving quickly in the same direction.