Essential Phone: The Bittersweet Journey of Android’s Father
“Failing Forward” is a series of case studies exploring product failures from various tech companies.
The Essential Phone, designed by Android co-founder Andy Rubin, had a relatively short-lived existence in the smartphone market, resulting in its discontinuation after just a year and a half since its launch, followed shortly by the closure of its parent company, Essential Products, in less than three years.
My encounter with the Essential Phone occurred during an involvement in a project with an e-commerce department tasked with handling B2B reverse logistics services. To my surprise, the warehouse housed thousand of untouched Essential phones, prompting the department to prepare a campaign for their resale. The phone’s captivating design and the noteworthy removable Essential 360-degree camera left a lasting impression on me, leading me to wonder: How did the father of Android fail to make a significant impact in the smartphone market?
Ambitious Beginnings
In 2015, Andy Rubin founded Essential Products (or Essential) with a vision to redefine the smart device industry by combining cutting-edge technology with elegant design. Rubin believed that the future of technology would revolve around artificial intelligence (AI) as the next operating system and platform. He envisioned a future where an AI-powered virtual version of the user would operate within the phone itself. This forward-thinking idea set the stage for Essential’s plans to develop an open-source and infinitely extensible platform called Ambient OS, which would seamlessly integrate with various smart devices in a home environment.
“What is the next OS? What is the next platform? I think it’s AI. It’s a slightly different AI to what we see today. Today we see a lot of pattern matching, a lot of computer vision for things like self-driving cars… The virtual version of you that’s operating in this phone, that’s the destination of this company.” — Andy Rubin, 2017
The initial steps toward this vision came with the introduction of the first product: the Essential Phone (or PH-1). The Essential Phone, unveiled in May 2017, and released in August 2017, marked Essential Products’ entry into the hardware market. However, despite the high expectations and innovative concepts, Essential Products faced a series of challenges.
Unfortunately, in February 2020, Essential Products announced that they would be winding down their operations, with no plans for further updates to the Essential Phone or the development of a successor model, PH-2. This decision signaled the end of Essential’s journey in the smartphone market, leaving behind unanswered questions and a sense of unrealized potential.
The Phone Itself
Basic Specifications
The Essential Phone was powered by a Qualcomm Snapdragon 835 processor, accompanied by an Adreno 540 GPU. It featured 4 GB of RAM, ensuring efficient multitasking capabilities. The device offered 128 GB of internal storage, with no option for expandable storage. It was equipped with two 13 MP main cameras, one of which was a monochrome sensor designed to improve detail reproduction in low light. The front camera boasted an 8 MP resolution.
Display
The phone featured an edge-to-edge display, measuring 5.71 inches and offering a QHD (2560 x 1312 pixels) resolution. Its minimal bezels maximized the screen-to-body ratio, providing users with a better viewing experience. The unique aspect ratio of 19:10 added to the phone’s distinctive appearance. Notably, the front camera was cleverly housed in a small cutout (notch) in the upper area of the screen, enabling an immersive display while accommodating the necessary front-facing camera functionality.
Color
The Essential Phone’s construction featured premium materials, with a combination of three colors for the durable titanium frame and four colors for the ceramic back. This fusion not only enhanced the device’s overall durability but also provided a premium feel that distinguished it from many other smartphones on the market. Additionally, an Amazon-exclusive version of the Essential Phone was launched, featuring a “Halo Grey” color variant and built-in Alexa functionality.
Modular Design
One of the standout features of the Essential Phone was its modular design. The back of the phone incorporated a magnetic connector system, enabling the attachment of various accessories, including the Essential 360-degree camera. This modular approach aimed to enhance the phone’s capabilities and expand its functionality, catering to the diverse preferences of users.
Software
The Essential Phone initially ran on Android 7.1 (Nougat) upon its release and had the ability to be upgraded to Android 10. The inclusion of an unlocked bootloader was a notable feature, as it provided an opportunity for a thriving developer community to modify and customize the phone’s software according to their preferences. This openness allowed for greater flexibility and personalization of the user experience.
The Market and Challenges
Even though the Essential Phone had a famous founder who led its development and stylish design, the phone faced numerous challenges, from manufacturing to entering the smartphone market. According to the industry research firm IDC, Essential sold fewer than 90,000 units in its first six months on the market. The issues were reported as follows:
Manufacturing Challenges
Upon its announcement in May 2017, the Essential Phone was expected to ship within approximately 30 days. However, the manufacturing process encountered significant hurdles, including shortages of essential components. This led to delays in production and the device was confirmed to start shipping by the fourth week of August. The struggles in establishing a smooth production chain resulted in a three-month delay from its original launch window.
Pricing Strategy
When the Essential Phone was released in August 2017, it entered a highly competitive smartphone market dominated by well-established brands. Initially priced at $699, which was comparable to flagship devices from established manufacturers like Apple and Samsung, the Essential Phone failed to justify its premium cost. Eventually, the price was reduced to $499 after aggressive cost-cutting measures, and a temporary $399 Cyber Monday deal was introduced. This deal included the Essential 360-degree camera, which was originally priced at $199.
Limited Carrier Support
The choice of Sprint as the exclusive carrier partner for the Essential Phone was considered a significant misstep according to Stephen Baker, a mobile analyst at NPD. By limiting availability to a single carrier in the United States, the device had restricted accessibility and limited exposure to potential buyers. In a market where carrier partnerships and subsidized deals play a crucial role, the exclusivity of the Essential Phone made it challenging for consumers to embrace the device.
“If you don’t have distribution, you can’t ever really be successful.” — Stephen Baker
Customer Data Leak
In August 2017, early customers of the Essential Phone experienced a privacy breach. Essential customer support accidentally sent an email to hundreds of customers requesting personal identification documents such as driver’s licenses or passports. The email was mistakenly CC’ed to several other customers, resulting in the inadvertent sharing of personal data. Approximately 70 customers had their information shared with a small group of unrelated customers.
Trade Secret Lawsuit
Essential faced a trade secret lawsuit in October 2017. Startup company Keyssa accused Essential of trade secret theft, alleging that Essential intended to incorporate a microchip developed by Keyssa into the Essential Phone but instead partnered with a different company, SiBeam, to produce a similar microchip. Keyssa claimed that Essential violated non-disclosure agreements by using their trade secrets to create commercial products. Essential, on the other hand, stated that their technology was not based on Keyssa’s know-how.
End, but not really the End
All these challenges may have contributed to the struggles faced by the Essential Phone in the smartphone market. The phone will no longer receive software updates after February 2020, and its next model development has been discontinued. In the same month, Essential announced the shutdown of its operations.
Do you think the story ends here?
The story of Essential didn’t entirely end with its shutdown. Nothing, a consumer electronics startup founded by Carl Pei (a co-founder of OnePlus), acquired the Essential Products trademarks and brand in February 2021, nearly a year after Essential ceased operations. As part of the acquisition, Nothing also gained access to Essential’s patents. Nothing has expressed its intention to launch an ecosystem of devices in the future, hinting at the possibility of interesting product ideas in Essential’s development portfolio, which includes patents related to voice setup instructions and voice-enabled home setup. With Nothing’s focus on smart devices and smart home technology, leveraging Essential’s patents could potentially expedite the development of enhanced technologies as the brand continues to grow. So, maybe the soul of Essential lives on in Nothing’s products, or maybe it’s essentially nothing. Only time will tell.
If you enjoyed reading about the challenges faced by the Essential Phone, you might be interested in my article “Fire Phone: The Rise and Fall of Amazon’s Smartphone Dream.” It explores the story of another phone brand developed by a tech giant, Amazon, that ultimately faced significant setbacks and failed to gain traction in the smartphone market. Enjoy reading!
Reference
- The Father of Android Is Back, and He’s Built the Anti-iPhone, Wired
- Essential PH-1 specifications, GSMArena
- Essential cancels its next smartphone, future of the company in doubt, Ars Technica
- Essential sold fewer than 90,000 phones in its first six months, The Verge
- Essential, Andy Rubin’s phone company, is shutting down, The Verge
- Essential is now officially owned by Carl Pei’s Nothing Technologies, 9to5google
- Essential Phone, Wikipedia
