Carl Pei’s Nothing is working on a smartphone

Seven years after co-founding OnePlus, Carl Pei left the smartphone maker in 2020 to launch his own venture. The company that became Nothing has, to date, launched a single product: the Ear (1) transparent earbuds. But it seems the executive is readying a return to the industry where he made his name.

Nothing has been working on a smartphone for over a year and plans to announce it by next month, a source with direct knowledge of the matter told TechCrunch. The entrepreneur has shown off a prototype of the device in meetings with several key executives from the industry at this week’s Mobile World Congress event in Barcelona, according to a source close to the company. TechCrunch has viewed a photo of one such meeting Pei had with Qualcomm’s chief executive.

Details around the forthcoming device are thin, though the source notes that the product will share a similar design language and “elements of transparency” seen in Nothing’s first product. Released in 2021, the earbuds have shipped 400,000 units as of late-January, according to the London-based hardware startup.

In an interview with TechCrunch last July, Pei noted that the company had several different devices on its roadmap, prior to teasing out the earbuds. “We have a lot of products in the pipeline. Earlier this year, we did a community crowdfunding round where we allocated $1.5 million to our community. That got bought up really quickly. But as part of that funding round, we had a deck with some of the products in development. Our products are code-named as Pokémon, so there are a lot of Pokémon on that slide. We have multiple categories that we’re looking at, but we haven’t really announced what those are.”

Pei certainly has the pedigree, as a co-founder and driving force behind OnePlus. The company’s first device arrived to an already mature — and seemingly saturated — category in 2014. Even so, it managed the difficult feat of breaking into the U.S. market on the strength of flagship build quality and mid-tier pricing. In 2021, OnePlus merged its hardware team with Oppo, its majority owner. Oppo, in turn, is owned by BBK, which is also behind key brands like Vivo, Realme and iQOO.

The meetings come during a particularly staid edition of MWC. The industry has suffered from years of stagnating and declining sales, which have only been exacerbated by pandemic buying habits and subsequent supply chain slowdowns and chip shortages. The smartphone market is well-positioned for disruption, but doing so will be Herculean task, as handsets have grown from novelty to ubiquity and good quality products can be had for cheap. Nothing certainly has sufficient funding to make a splash, however. The firm has raised more than $70 million from scores of high-profile investors, including GV, Tony Fadell, Casey Neistat, Kevin Lin and Steve Huffman.

It has also managed to build a following of its own by taking a similar community-driven focus, as well as a release schedule and marketing campaigns clearly informed by Pei’s interest in the sneaker market. But while the company was able to drive interest in a $99 pair of wireless earbuds, doing so in the well-established smartphone world is a different matter entirely.

Long-time leaders like LG and HTC have fallen away in recent years, while even big names like Google have found the industry to be an immense challenge. Players like Apple, Samsung and Xiaomi currently dominate global sales, followed by a number of the aforementioned brands under the BBK umbrella. Last week, newcomer Onward Mobility announced that it was scrapping plans to reboot the BlackBerry brand.

Nothing founder Carl Pei on Ear (1) and building a hardware startup from scratch

Essential, famously, was unable to make a go of things, in spite of massive $300 million in funding, though one can point to plenty of missteps and other issues with the Andy Rubin-founded company. Pei’s firm subsequently purchased the Essential branding, a move he later told TechCrunch came when the company was considering adopting the name of the ill-fated hardware maker. A number of Essential employees, meanwhile, have gone on to launch their own new smartphone company, OSOM, which plans to release a device this year.

Nothing declined to comment on this report.

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