As the creator of Android is trying to release the first "anti-smartphone"
Startup Essential Products, founded by Andy Rubin, the creator of Android, in 2017 inspired a lot of hope. It invested Amazon, Foxconn and Tencent. Two weeks before the release of his first device, Essential, he became a “unicorn”. In Silicon Valley slang, this means that the firm has begun to be valued above $ 1 billion. Android enthusiasts in the United States believed in the new smartphone, and the HYIP around it began to take shape rather serious. Even Artemy Lebedev then wrote in his blog:
The most interesting company for today is Essential. I am sure that they will be able to move many. And we will hear more about them.
To justify the dreams was not destined. The smartphone market is already quite tightly compressed, especially at the flagship level. Even Google now has a hard time with Pixel sales . Only 4 million units managed to sell in 2017 - compared with 217 million iPhones. The new startup Andy Rubin with marketing and the power of Google just could not match. Essential did not disclose its sales, but it was estimated that they were on-a-less less than 4 million.
Enthusiasts bought their smartphones, but, compared to the mass market, they turned out to be few, and the word of mouth did not work. In the first weeks, only 5,000 devices were shipped. The demand turned out to be lower than expected, and in order to somehow cover the losses, the price of the device had to be quickly reduced from starting $ 699 to $ 499. Buyers who bought a smartphone at an initial price received a certificate for $ 200, which could be spent on one of the Essential “addons”, such as a camera capable of shooting all 360 °.
The smartphone was released in August. Until the end of 2017, according to rumors, it was possible to sell 80,000 devices. And for the entire first year of sales - about 150,000. For the “most hyip product”, this is somehow not at all. Right before the release of the device, startup Essential Products was estimated at $ 1.2 billion, but its capitalization has plummeted. Taking into account annual sales, which could not bring more than $ 60 million, it is now estimated at $ 330 million, or even cheaper.
In May, Andy Rubin canceled plans to release Essential Phone 2. And even according to rumors, he put the company up for sale. There were no buyers (or the offers were lower than Andy had expected). And now, six months later, the strategy is changing. Now Essential 2 will still be developed, but it will not be the smartphone that was expected. Instead of the standard for Apple, Xiaomi, Samsung and other improvements in the design and characteristics of the previous model, Rubin wants to make a radically different device, moreover, such that it can only be called a “smartphone” with a big stretch.
Go for broke
The most annoying thing was that Essential had chances for success. They are quite able to develop devices. The first smartphone was no worse than the others on the market, and in many ways (for example, the design of the back panel, the screen from edge to edge and battery life) is even better. Mostly bad sales analysts blamed on bad marketing and bad strategy. At the exit, Essential was very expensive, like a new iPhone, and Rubin did not invest in advertising from the principle.
Now on Amazon, the device costs $ 350 , and if it were immediately released at that price, it would be considered for a completely different category of users. Trying to get into the league of top flagships with their first device, while still without marketing, turned out to be a bad business decision. And, of course, the gradual collapse of the smartphone market, which has less space for new players, has impacted. Even Microsoft and BlackBerry in the past few years have had to leave this market under pressure from the Chinese in order not to lose money.
All these problems, says Rubin, will be taken into account in the new device of the company. Firstly, it will not be exactly a telephone. It will be much smaller, with a small screen, and it is supposed to be used together with the main smartphone as a “companion device”. Secondly, the main feature will not be a titanium back cover and not premium features, but built-in software. The device will have an AI capable of imitating your way of speaking in order to answer calls / messages for you. Manage the user will be mainly voice commands. So far, nothing like that, according to Rubin, is on the market. The closest parallel is the gadget of the protagonist from the film “She”.
As planned, such a “mini-smartphone” will help, for example, respond to messages and email, get rid of annoying telephone advertisers, make appointments for the time you specify, and carry out other small tasks. As a plus, it will be possible to leave the main phone with a large screen in a bag or backpack, and enjoy all its functions through a small pocket device that fits anywhere.
In an interview with Bloomberg, Andy Rubin talks about his vision of the benefits of the device:
If I can make your phone a virtual version of you, you can fully enjoy life, dine, watch a movie without touching your phone. And at this time he will deal with all the boring tasks for you. It seems to me that I will be able to remove this habit of people constantly checking their smartphone, worrying that they have messages or unanswered calls. We all get a little less stress.
Essential Products invested about $ 300 million. This makes the company the most ambitious startup of Silicon Valley in the field of consumer electronics. Even after the failure of Essential smartphone, the company still has money and talented developers. Plus, Rubin doesn't have to develop his AI from scratch. He plans that his technology will simply drive teams through Siri, Alex and Google Assistant, slightly adapting to your preferences and characteristic speech patterns. That is, all the chances that Rubin will succeed in releasing his product are quite to himself (unless, of course, he succeeds in convincing the competitors to give him an API).
The first prototype of the “anti-smartphone” is supposed to be completed before the end of this year. And in January at the CES 2019 exhibition in Las Vegas, the device wants to show the industry leaders in order to attract additional investments. At the same exhibition last year, the first version of the Essential phone was secretly demonstrated.
True, the question remains as to how much technology will be better than the finished Google Duplex AI, a personal assistant, which is already being built into the new Pixel 3 . He already knows how to take calls for you, conduct a dialogue with the interlocutor in a voice, ask him questions, squeeze information and then transfer it to you in a convenient way. Soon this technology will be available to everyone on Android. In this case, the new device Rubin will remain useful only for people with iOS, and even then, most likely, not for long. The budget of $ 300 million is certainly not bad, but with Google, Apple and Amazon, which have been spending billions on creating their AI for many years, Essential Products will hardly be able to fight for several years. According to experts, the future of a startup is still very uncertain.
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