Smartphone Company

Amazon Financially Backs New Smartphone Company

A new smartphone company, Essential, plans to launch its smartphone in the coming weeks.

Things are looking both good and bad for Andy Rubin, the founder of Android and the creator of smartphone company Essential. In the past several weeks, Essential has lost three major executives and secured $300 million in investments from Tencent and Amazon.

For Amazon, this is the second major attempt to back a competitive smartphone. The first attempt was an ultimate failure when Amazon backed its own smartphone (the Fire). The phone “never made a dent in the overall smartphone market,” according to an article by CNBC.

The Essential smartphone was announced in late May, with early shipping dates set for June. The promised phone still hasn’t hit the market. Essential has yet to provide another launch date, saying only that the phone will be due “in a few weeks” and will be sold through Amazon and Best Buy.

“It’s not clear why Amazon and Tencent are investing in the company,” the CNBC article reads. “Which has had a rocky start, losing its vice president of marketing, head of user experience and head of communications all before the smartphone’s debut.”

Speculation suggests Amazon is attempting to get its Alexa voice assistant pre-installed on the device. Amazon made a statement fueling this theory.

“Essential Products has a compelling vision and roadmap for connected devices that integrate voice technology in novel ways,” Amazon said. “We are excited to see Alexa become part of that vision where interacting with technology is simple, helpful and creates an interface that others can build on and innovate. We look forward to what will come from this collaboration.”

Tencent has yet to comment on its investment.

The Essential Smartphone Company Battle

Essential is already facing an uphill battle. The vast majority of smartphone owners choose iPhones or Android devices for primary use. To add to the challenge, Essential is partnered with only one carrier in the United States – Sprint.

LG, HTC, and Motorola are already struggling to compete against the top two smartphone company players, Apple and Samsung. Will Essential secure a spot among them?

Other investors in Essential include Redpoint, Playground, Access Technology Ventures, Altimeter Capital, Foxconn, and VY Capital.

Perhaps these investors are hoping Rubin has developed a concept even greater than Android. Rubin co-founded Android before he later sold it to Google. In many ways, Rubin is competing with a younger version of himself.

“I know people are going to ask me a lot of questions about why I started this company,” Rubin wrote on the Essential website. “Why didn’t I just travel the world, ride my motorcycle, tinker with my robots, hang out at my bakery with friends and family…why did I create Essential?”

Rubin proceeded to talk about new beliefs – and a world with fewer technical problems.

“Devices are your personal property,” he wrote. “We won’t force you to have anything on them you don’t want to have. We will always play well with others. Closed ecosystems are divisive and outdated. Premium materials and true craftsmanship shouldn’t be just for the few. Devices shouldn’t become outdated every year. They should evolve with you. Technology should assist you so that you can get on with enjoying your life. Simple is always better.”

With these concepts in mind, the Essential smartphone will (hopefully) launch soon, with interested investors in tow.
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