Founder and CEO of Nothing, Carl Pei said that the company is going to launch its first smartphone “Phone 1” in the United States to challenge Apple iPhone dominance.
Pei is a Chinese-born Swedish entrepreneur and former co-founder of OnePlus. In 2020, he founded a new hardware startup called Nothing in London which is also backed by iPod creator Tony Fadell and Alphabet VC arm GV.
The company launched its first product “Ear 1” in 2021. Nothing debuted “Phone 1”, a mid-range smartphone available in the Middle East, Europe, and Asia. In his interview with CNBC, Pei explained Phone 1 did not launch in the U.S. and Canada because of the need for a lot of additional technical requirements to support all carriers and the customization that a small startup company was not ready for at the time the ‘Phone 1’ launched.
The recent increase in sales of Nothing’s Ear (1) headphones in the United States motivated Pei to deliberate launching Phone 1 in the country. He said:
“It’s definitely a market where there’s already a lot of interest for our products. And if we launch our smartphones there, I’m sure we could obtain significant growth.”
Nothing Phone 1 will give consumers a new Android option to leave iPhone’s locked-in ecosystem
Nothing Phone 1 resembles iPhone’s flat slab design with the all-screen display, side buttons, and the vertical orientation of the main dual camera system. As a mid-range smartphone, it starts from $470 like the iPhone SE (2022).
However, Pei said that Apple has locked-in consumers in its ecosystem, especially Gen Z, with features like iMessage, and AirDrop which has made it difficult for smaller Android-based manufacturers to compete.
“There might be a time where Apple is like 80% of the overall market and that just does not leave enough space for Android-based manufacturers to keep playing,” he said.
Apple’s active installed base, which takes into account people who bought phones second-hand, surpassed 50% in the U.S. in the second quarter, surpassing Android, according to data from Counterpoint Research.
Commenting on the Apple App Store commission, he said that “in a couple of years’ time, Nothing may have to have a serious think about this problem and how we tackle it. It’s going to create a ceiling to our growth.”
He also shared that Nothing has so far faced several challenges like securing Foxconn as its manufacturer, the COVID-19 restriction around the globe and China, and macroeconomic conditions.
Nothing has sold over 1 million products to date globally, with its Ear (1) and Ear (stick) earbuds selling 600,000 units and the Phone (1) reaching 500,000 shipments.
In his latest honest review of the iPhone 14 Pro, Pei praised the smartphone’s performance and camera quality. He also said that he has been an Apple fan for a very long time.