Mike Wuerthele
SoftBank CEO Masayoshi Son has reportedly axed plans to invest $100 million in Android founder Andy Rubin's smartphone startup, reportedly because of SoftBank's close business ties to Apple.
In a new report from the Wall Street Journal, not only has the investment in the company been cancelled, but a plan to have the marketing arm of SoftBank advertise the phone has been scuttled as well. It is not clear what impact the withdrawal of funding will have on the startup, valued at about $1 billion assuming the investment had been made.
Essential Products was registered in California in 2015 by Rubin and a cadre of ex-google employees . A trademark listing for the company in 2016 listed smartphones, tablets, and "computer operating software for mobile phones" all associated with the company name.
According to sources familiar with the matter, Apple did not actively block the "nearly complete" funding deal.
Rubin's company was reportedly in the prototype process of a high-end smartphone to compete with the iPhone 7 pricing. A magnetic connector of some sort was associated with the effort, allowing for easy expansion of the phone, a concept that Google itself stopped developing when it cancelled Project Ara.
It is not known if the $100 million was coming from SoftBank itself, or the $100 billion "Vision Fund" aimed at incubating U.S. tech businesses. Apple is a contributor to the "Vision Fund."
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9 Comments
Hey Andy Rubin, Ripping off iOS for Android is one thing. Competing with the Apples and Samsungs of the world in hardware is another matter entirely. Good luck!
Why would anyone want to invest 100 million in a High end Android startup? There's no money in hardware sales. Android hardware is a commodity. Few people will fork out the money on a Android phone priced in the same range as a iPhone. Not when you can get a pretty good Android phone for $200. Google is trying to do the same thing by dumping the cheap Nexus phones and going with higher priced Pixel phones. That way they can make a profit on the hardware. Google has the added advantage of owning the OS and so customizing software and hardware like Apple, which is a unfair advantage to everyone else. With Quick updates and whatnot. Look at BlackBerry trying to save their phone market by going Android. It didn't do anything and that's a well known brand name. It's a race to the bottom in profits market. Apple makes 90+% of the profits and Samesung makes most of what's left on Android and very little is made from anyone else, and some are losing money. High end Android Phones is a loser market.
I suspect the real reason it was pulled is because someone with the credit card had a late attack of common sense.
Where's the differentiator?
"the startup, valued at about $1 billion"
....that is messed up. they have no product, no sales, and Android is a crowded marketplace on near-identical commodities. why are they valued at a billion already!?