Essential Products, a US-based smartphone maker backed by corporate investors Amazon, Access Industries, Foxconn and Tencent, announced yesterday it is ceasing operations.
Founded in 2015, Essential released its first product, a smartphone called PH-1, two years later. It was designed to run Android, the operating system co-created by chief executive Andy Rubin before it was sold to Google, now a subsidiary of internet and technology conglomerate Alphabet.
The company also released a range of accessories for the PH-1 including a high-definition audio adapter, but Essential failed to ship more than 88,000 units in the first six months after the phone’s release while its camera received mixed reviews.
Essential also operated email platform Newton Mail following the acquisition of its developer, CloudMagic, in late 2018, and will close that service at the end of April 2020.
A range of other devices, such as a smart home assistant and a new operating system, were on the blackboard but neither project came to fruition. A second-generation phone, Project Gem, was cancelled as part of the company shutdown.
Essential was valued at $900m to $1bn when it last raised funding, in a $300m round in 2017 featuring contract manufacturer Foxconn, internet group Tencent, e-commerce firm Amazon’s Alexa Fund and Access Technology Ventures, a subsidiary of conglomerate Access Industries.
The 2017 round was also backed by Redpoint Ventures, Altimeter Capital and Vy Capital. It came after Redpoint Ventures and Playground Global, a venture capital fund run by Rubin, had supplied $30m for the company in 2016.
Essential had originally been exploring a sale in mid-2018 and had at the time appointed financial services firm Credit Suisse to solicit offers.
Image courtesy of Essential Products.
