An analyst suggests that Amazon's anticipated AI phone could fail to make an impact from the start.

      This may be the least opportune moment for Amazon to introduce a phone.

      Recent leaks suggest that Amazon is preparing to re-enter the smartphone market with a device centered around artificial intelligence. Nonetheless, analysts express skepticism regarding the timing of this move.

      A recent report outlines that industry experts consider this to be “the worst possible time” for Amazon to re-enter the smartphone sector, despite incorporating AI features.

      Reasons why an Amazon AI phone may not be timely

      One of the primary concerns highlighted in the report is the overall state of the smartphone industry. With increasing component costs and a persistent memory shortage, the market is projected to decline by about 13% by 2026. Therefore, Amazon would be entering not only a highly competitive field but also a shrinking market.

      How can Amazon compete with giants like Samsung and Apple?

      This situation is unfavorable for Amazon, which is attempting to revive its presence in the market following the failure of its Fire Phone in 2014. Although Amazon has heavily invested in artificial intelligence and may provide a commendable AI experience, the competition poses a significant challenge. The original Fire Phone faced numerous obstacles, including the integrated ecosystems and refinement offered by established smartphone brands.

      Thus, having AI alone may not suffice.

      The rumored device from Amazon, reportedly codenamed “Transformer”, is anticipated to focus significantly on AI. It is likely to incorporate Alexa and aim to reduce dependence on conventional apps. Although this approach appears innovative in theory, we have seen AI-first products struggle to capture consumer interest in the past, often feeling more like experiments than indispensable devices.

      There are indications that Amazon is developing a more minimalist or “secondary” phone. While there is some demand for simpler devices, analysts argue that the market size is insufficient to support Amazon's scale and aspirations.