
Android Creator’s Startup Essential Products Cuts About 30% of Staff - minimaxir
https://www.bloomberg.com/news/articles/2018-10-17/andy-rubin-s-startup-essential-products-cuts-about-30-of-staff
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xd1936
I'm super interested in the rumors that Essential is working on "an anti-
smartphone with a small screen that relies primarily on voice commands."[1]
The world needs more sub-5" phones now that Sony isn't making the Compact
phones, and Apple isn't making a successor to the iPhone SE.

1\. [https://www.androidpolice.com/2018/10/10/essential-ai-
phone-...](https://www.androidpolice.com/2018/10/10/essential-ai-phone-that-
operates-mainly-through-voice-commands/)

~~~
pavlov
Palm has been resurrected as a brand for tiny phones:

[https://arstechnica.com/gadgets/2018/10/palm-rises-from-
the-...](https://arstechnica.com/gadgets/2018/10/palm-rises-from-the-dead-as-
a-zombie-brand-launches-tiny-smartphone/)

~~~
Splines
Which is cool until you find out that it's $350.

~~~
erikpukinskis
Can you explain what you mean? Are you saying you think the size of the
display is a primary cost center for phones, so small screen phones would have
a substantially cheaper bill of materials?

~~~
Splines
> _Are you saying you think the size of the display is a primary cost center
> for phones, so small screen phones would have a substantially cheaper bill
> of materials?_

Not exactly. The way this phone is being marketed is very strange - this phone
is designed as an "add-on phone", it can only be used as an add-on to an
existing line.

As a standalone phone $350 isn't too bad, but asking people to pay $350 in
addition to whatever they want to pay for their "main" phone is a little much.

They're in Apple Watch territory with this pricing and I don't think they have
the ecosystem to demand that kind of price.

------
axaxs
I'm a bit sad to see this, but it wasn't hard to predict.

Essential launched its PH1, which was design-wise ahead of the curve. But,
they didn't really seem to listen to or predict the market.

First, there was no headphone jack. That's controversial, but you've probably
lost what I'd guess at least 10% of your potential market by doing
so(potentially as high as 40%).

Second, the camera at launch was not good. That's probably what is most
important to most people. I've heard it's gotten better, but a bit late.

Last, and most importantly, it was absolutely overpriced. It brought nothing
to the table to warrant its price, and probably should have been sub $500 at
launch.

Each of these points can be nitpicked by saying "well Samsung/Apple/LG/Oneplus
did it", but Essential is not that. They are an unknown startup company with
no consumer trust. You cannot expect people to give up features and pay
Samsung prices before they know who you are.

/rant

~~~
nradov
How was it design-wise ahead of the curve? All I see is yet another flat
rectangle. With a notch. Ugh.

It's a shame that no one really tries to innovate on mobile device design any
more in order to target niche markets. But perhaps the economics of mass
production mean that's no longer a viable strategy.

~~~
laughingpine
> With a notch

I believe it was one of (if not) the first with a notch.

~~~
EpicEng
The notch isn't really a design feature though... assuming you're being
sarcastic.

~~~
polishTar
One man's notch is another's "edge to edge display". The cutout allows a
higher display to body ratio, which some people value.

~~~
EpicEng
In other words, an unfortunate trade-off which exists due to a technical
limitation. No one _wants_ a notch.

------
claydavisss
Still can't figure out what space they are looking to occupy.

The Pixel phones have staked out the expensive-but-good market for "pure"
Android snobs.

Samsung has staked out the best-hardware-early market with deep ties to cell
providers.

OnePlus has staked out the cheaper-but-surprisingly-good market previously
held by the Nexus line.

Where does Essential fit? Rubin never answered this question. Outside of a few
tech people, no one knows Essential exists...even OnePlus runs ads.

I suspect Rubin thought he could just build some brand buzz and flip the whole
company?

~~~
cco
The Essential phone handily beats OnePlus at $500 or $450. It was priced at
$750 I believe on launch and failed completely there.

Essential also seemingly spent a lot of time, money, and internal phone volume
on their add on feature. A complete waste as anybody with an ounce of sense
could have told you. Drop that work, add in an audio jack or a second USBC
port, sell at $500 and they would have done reasonably well for a first
product.

~~~
SamWhited
I'd get the OnePlus even at that price range; it may not be as nice looking,
but it's at least sort of repairable. If you break your essential they make
you buy a new one at a slight discount. ifixit gave the essential a 1/10 for
repair ability.

~~~
cco
Completely agree that the lack of easy repair is a valid criticism of the
Essential phone.

------
vsviridov
/r/titlegore

Took me a while to decypher that it meant "Android creator's startup Essential
Products cuts about 30% of staff"

~~~
thaumasiotes
It's so easy to fix:

Android Creator's Startup, Essential Products, Cuts About 30% of Staff

~~~
NullPrefix
Essential Products, founded by Android creator, cuts about 30% of staff.

------
sonnyblarney
The differentiator is not clear enough. If you're up against massive entities
who can produce on the cheap, the value prop in consumerland has to be obvious
and poignant, i.e. it should be easy to create a narrative that 'this phone is
the best for X' and a lot of people want X. It can be aspirational or
functional or both or whatever but it has to pop.

~~~
nakedrobot2
Or maybe their phone sucked. Which, apparently, it did. Especially the camera.

~~~
Steltek
Not familiar with any issues besides the camera.

~~~
SamWhited
It's also completely impossible to repair and the screen cracks if you breath
on it wrong (contrary to all their claims about toughness they advertised so
heavily when they came out with it). By impossible to repair, I mean quite
literally no one including them will repair it, if something goes wrong they
will send you a new one at a slight discount, but given how expensive it is
that's not much comfort since you can still buy another brand of phone cheaper
(I think it was $200 off, which is a bit better now that they've dropped the
price, but still insane for a "repair"). It's a serious waste of money. Looks
nice though. EDIT: I say it looks nice, but the polished back was a stupid
idea; everyone complains about their phone being covered in fingerprints, so
if you do mirrored metal guess what happens… it's the worst phone I've ever
had for looking dirty.

------
samfisher83
Why don't we have xiaomi in the US. One plus has crept their price up. I think
if we have a company that can go make a pocofone would do well here. If you
can get 90% of flagship features for less than 1/2 of the price I think you
could do well in the US.

~~~
zhobbs
They would have to get a lot of patent deals in place and pay a lot of
royalties, so the price point would likely be significantly higher.

------
arthurcolle
I don't understand why Essential suicided itself by immediately putting itself
up for sale. Such a lost opportunity

~~~
bdcravens
Remember that Android, Inc was purchased by Google in less than 2 years after
being founded, and before it even launched a product.

~~~
arthurcolle
what are you getting at? he's not The Messiah?

~~~
bdcravens
That his previous success came via a quick exit/acquihire, which is what's
he's trying to do again.

~~~
Latteland
Google should buy this company, add a jack and wireless charging, sell it for
$400 and declare victory.

~~~
arbie
Why would they sabotage the Pixel's pricing strategy like that?

~~~
Latteland
I think it's basically as good as a pixel. Is there anything that comes from
the pointless "neural network" chip in it? Nothing that I can see, but it's
possible there's something new that I don't know about.

Really, just add a jack to it and declare victory.

------
matchbok
Sad to see. It seems there really isn't a market for these types of Android
phones.

~~~
Steltek
A classy phone not from a giant tech company or with questionable governmental
ties? No forced bloatware? Fast, reliable updates?

There's really no market for that? The market is stupid and wrong.

This isn't a failure of technology. This is a failure of marketing and getting
the message out.

~~~
nine_k
The market is there, of course! It just appears to be narrower that what's
required to sustain a company like this, at least at the price point they
chose.

I can imagine such a phone as a no-compromises ultra-premium product for the
select few who want utter privacy and safety, and would pay at e.g. the
iPhone's price point for a comparable level of assurance.

I can imagine such a phone at a low-end, cheaper segment for the privacy-
conscious but not very well-off who could tolerate a number of compromises in
features.

At a mass-market segment it, unfortunately, did not seem to work too well,
though.

~~~
notyourday
It was overpriced. They sold what? 50k phones at about $500 a pop average
before cutting the price to $350? That's $25m in revenue after raising $300m.
They should have continued working on a line of phones. Instead they switched
gears, dropped the price on a phone and started doing a fire sale.

~~~
radicaldreamer
It's kind of bizarre planning to bet the whole company one one product whose
go-to-market strategy wasn't clear.

~~~
notyourday
If you decide you are going to be a smartphone company, after you do
sufficiently well on your first phone you do not go and decide to go into the
market of connected home.

