uploads///The Smartphone Market Is Already Cutthroat

Will Amazon’s Backing Propel Andy Rubin’s Essential Products?


Aug. 12 2017, Published 3:35 p.m. ET

Essential Products is being backed by Amazon and Tencent

Andy Rubin’s startup handset maker, Essential Products, revealed that it received $300 million in funding in a Series B round from Amazon (AMZN) and Tencent (TCEHY), according to the Wall Street Journal. Essential Products has created a lot of excitement around the Android-based smartphone, as it is founded by Rubin, the father of the Android smartphone. The new smartphone’s distinctive design optimizes the device’s screen area, and it features a 360-degree camera.

Essential Products noted that Amazon and Best Buy would help launch its products in the United States. The startup is preparing to take on Apple and Samsung in the smartphone space.

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The launch date of the titanium-encased smartphone is not known yet. However, the $699 smartphone is being positioned as the competitor to Samsung’s (SSNLF) flagship Galaxy S8 and Apple’s (AAPL) iPhone. The company is aiming to launch the smartphone around the same time as Apple and Samsung’s latest offerings.

Essential entering a crowded market

As the graph above shows, Essential Products is entering an already-crowded segment. It could face stiff competition, especially in markets like China, where local producers such as Huawei, Oppo, and Vivo already have the upper hand.

At first, Essential Products’ handset would be distributed exclusively through Sprint (S) in the US and Telus in Canada. This may present a headwind for the company, as Sprint is only the fourth-largest carrier in the United States.


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