Nothing Phone – Risky branding

Nothing phone needs to not live up to its name.

• Another brave soul has decided to have a crack at the highly concentrated and brutally competitive smartphone market which, unless it has something pretty special up its sleeve, is going to end in another expensive disaster (like Essential).
• Last time around it was Andy Rubin’s start-up called Essential Products (see here) which raised $330m and burned it all on building a suite of interconnected products that were all supposed to work perfectly together.
• The problem was that none of them were essential meaning that no one bought them leading to an ignominious shut down in 2020.
• To be fair, and despite its name, Nothing has more going for it than Essential did.
• This is because its founder Carl Pei was a co-founder of the successful Chinese brand One-Plus and the company has already produced a set of wireless earbuds that have been well received, cheaply priced and sold around 500,000 units.
• The company also has credible backers with money coming from Alphabet’s ventures and Tony Fadell, one of Apple’s well-known former designers.
• This does not guarantee success and the company has a huge hill to climb when it comes to enticing users to buy its products.
• Android is an ocean of sameness and it is incredibly difficult to tell one device from another these days meaning that differentiation comes down to hardware specification and price.
• This is where Nothing is going to have difficulty because it is up against much bigger companies who can spend far more on R&D and then spread the cost of those investments over a much larger number of devices.
• Hence its ability to differentiate through cutting-edge technological innovation in smartphones is going to be very limited.
• One possibility is that Nothing differentiates itself by doing nothing at all which would be amusingly ironic.
• One of its main backers is Google meaning that it may have had the opportunity to implement Google’s version of Android with all of the latest bells and whistles.
• Given the likely price point, I don’t see this device competing directly with Pixel and so I don’t think that Google has much to lose by giving Nothing access to all of its latest software and AI innovations.
• All of the other Android handset makers insist on tweaking Android to fit their own requirements and strategies and very often end up making the device worse or filling it with bloatware that no one wants (eg Samsung Bixby).
• This is what I mean by doing nothing at all.
• Given the history of new entrants into this mature and crowded market, I am not optimistic that this venture is going to succeed because it has yet to demonstrate why anyone should buy its products.
• The choice of name also does not fill me with optimism as the company is already the but of endless jokes from the technology media who Nothing will need to recommend the device so that it sells in decent volumes.
• Nothing is the antithesis of Essential Products which had to live up to its name to succeed.
• Nothing must drastically fail this test to have a chance.