Essential Phone 2 Project Canceled as Android Creator Andy Rubin Puts Company up for Sale
Essential Phone 2 was expected to come with a wave of improvements, but according to people close to this information, Andy Rubin, the creator of Android has reportedly put the company up for sale. This potentially means that the project for the upcoming flagship has been canceled as the co-founder of the company is rumored to seek a buyer. Part of why the Essential Phone failed was not due to its hardware or design, but its ridiculously high price tag.
Essential Said to Have Invested $100 Million in the Development of the Essential Phone
Essential, the maker of the Essential Phone is considering selling itself and has canceled development of a new smartphone, according to people familiar with the matter. The startup has hired Credit Suisse Group AG to advise on a potential sale and has received interest from at least one third-party entity.
The smartphone startup, part of Rubin’s incubator Playground Global, has raised approximately $300 million from several investors, including Amazon, Tencent and Redpoint Ventures. A while back, it was valued between $900 million to $1 billion and even Sprint, the U.S.-based carrier had launched a marketing campaign attempting to sell the device to consumers.
The company is said to have spent more than $100 million on developing its smartphone, which is around a third of the money it raised to build the company. The sale of the company includes its patent portfolio, hardware products like the original smartphone, an upcoming smart home device and a camera attachment for the phone. The hired talent which is said to have been recruited from Apple and Google are probably going to be part of the deal, but Essential has yet to give the green signal on the sale.
When the Essential Phone launched, it was accompanied by a tremendously high price tag, which would obviously put off customers. It was being sold for $699 but after a very poor response from the market, the phone’s price was slashed by $200, resulting in more sales.
In addition to its price, the smartphone was plagued with software problems which took some time to address and that is not going to make customers an avid fan of the product. While the potential sale of the company seems like a viable option, we have yet to find out which entity is interested in the startup smartphone maker.
Who do you think would be interested in Essential? Tell us down in the comments.
News Source: Bloomberg
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