The Nothing Phone (1).
UK-based consumer tech company None of which has its sights set on the US Apple iPhone.
The startup, the hardware venture of Carl Pei, co-founder of Chinese phone maker OnePlus, is in early talks with US carriers about launching new smartphones in the US, Pei said. He told CNBC, but did not name the carrier.
In July, Nothing launched the Phone (1). This is a mid-range device with similar design, price and specs to Apple’s entry-level iPhone SE.
The company collaborated with iPod creator Tony Fadell of the alphabet VC division GV has so far only launched smartphones in Europe, the Middle East and Asia, not the US or Canada.
In an interview with CNBC, Pei said, “The reason we didn’t launch the service in the US is because we have a lot of work to do to support all the carriers and the unique customizations they need to make on Android. Because we need additional technical support.” “I used to feel like I wasn’t ready.”
“We are currently in discussions with several US carriers about the possibility of launching future products in the US,” said the Chinese-Swedish entrepreneur.
like apple When samsung It has already established relationships with major US carriers, making it difficult for smaller companies to compete.
But Pei added that one-third of sales of recently launched in-ear (stick) headphones now come from the United States.
“It’s definitely a market that already has a lot of interest in our product, and I’m sure if we put smartphones there, we can see a lot of growth,” he said.
The company expects that to grow from about $20 million in 2021 to an estimated $250 million this year, more than tenfold in 2022. Also, the number of employees he has more than doubled to over 400.
“Our goal is to be profitable in 2024,” said Pei. “Right now we are not profitable, and this year has been even more difficult because of foreign exchange. We pay a lot of COGS. [cost of goods sold] But we make profits in pounds, euros and Indian rupees, so everything is devalued against the US dollar. ”
The US dollar has risen this year.of dollar index — which measures the US dollar against a basket of major currencies — is up more than 8.5% year-to-date.
Pei wants to try Apple’s iPhone in the US, but it’s a steep climb.
“While iOS is becoming more and more dominant, Android has challenges. Especially among Gen Z, iMessage and AirDrop are locked in very strongly. he said.
“There may come a time when Apple has something like 80% of the total market and there is no room for Android-based manufacturers to continue competing,” he said.
When contacted by CNBC, Apple was not immediately reached for comment.
Pei says he sympathized Elon Muskhe has been putting pressure on Apple as Twitter’s new CEO App Store limits and 30% fee charged for in-app purchases.
He added that in a few years it may not be necessary to “think seriously about this issue and how we approach it.”
“It will put a ceiling on our growth,” Pei said.
david vs goliath
Pei said his company faces many challenges in bringing products to market. One of the big setbacks the company faced was when he turned to Foxconn, Apple’s biggest iPhone supplier, to make phones.
Pei said Foxconn refused to do business with Nothing, citing its past failures in the smartphone industry.
“Every startup maker works with Foxconn,” said Pei. “But when it was our turn, they said no because every startup they worked with failed. I couldn’t get it back.”
Foxconn was not immediately available for comment when contacted by CNBC.
Covid-19 restrictions around the world have also become a major hurdle for the company. In India, where Nothing produces mobile phones, the company was unable to send engineers due to travel restrictions, and Pei said the company had to remotely manage its ground factories.
“I had to work really hard to make this,” he said of Nothing’s smartphone.
In Shenzhen, China, where authorities have imposed a strict lockdown, Nothing’s engineers designed components within the mandated 45 minutes allowed for people to go out and buy groceries. It was necessary to discuss the mechanism with
To date, no product has sold more than 1 million units worldwide, Ear (1) earphones have sold 600,000 units and Phone (1) has reached 500,000 shipments.
Still, the startup is a small player facing a bleak economic outlook that’s forcing people to severely limit their spending.
In Europe, smartphone shipments fell 16% year-over-year in the third quarter, but increased slightly from the previous quarter on the back of strong iPhone 14 launches.
Samsung is Europe’s largest smartphone maker with 35% market share, followed by China’s Xiaomi at 23% and Apple at 21%.