An analyst suggests that Amazon's anticipated AI phone may not succeed.

      This may be the least favorable moment for Amazon to introduce a smartphone.

      Recent leaks suggest that Amazon is preparing to re-enter the smartphone arena with a focus on AI technology. However, analysts are skeptical about the suitability of the timing.

      A new report indicates that industry specialists consider this to be “the worst possible time” for Amazon to return to the smartphone market, even with the incorporation of AI.

      Reasons why an Amazon AI phone is not timely

      One significant concern highlighted in the report is the current state of the smartphone industry. With component costs rising and a persistent memory shortage, the market is projected to contract by about 13% by 2026. Thus, Amazon would not only be venturing into a competitive environment but also one that is declining.

      How can Amazon compete with giants like Samsung and Apple?

      This situation is unfavorable for Amazon, which is attempting to recover from the failure of its Fire Phone in 2014. While Amazon is heavily invested in artificial intelligence and its AI features might be robust, the fierce competition poses a considerable obstacle to success. The original Fire Phone faced several challenges, including the established ecosystems and refinement of experience from veteran smartphone manufacturers.

      Merely having AI might not suffice.

      The rumored device from Amazon, reportedly codenamed “Transformer,” is anticipated to significantly emphasize AI capabilities. It is likely to incorporate Alexa and seek to minimize dependence on conventional apps. While this concept sounds innovative and could differentiate it from competitors, this is not the optimal time for an AI-first product, which has had difficulty achieving popularity. Such devices often come across as experiments rather than essential tools.

      There are suggestions that Amazon is designing a more streamlined or "secondary" phone. Although there is some demand for simpler devices, analysts argue that the market is too limited to accommodate Amazon’s scale and ambitions.