Rubin had co-founded Android Inc. with Rich Miner, Nick Sears, and Chris White in 2003, and Google bought the company in 2005 for $50 million. Rubin continued to lead Android’s development for the next eight years.
The PH-1 was meant to overcome some of the shortcomings of the open-source platform. It had Android 7.1.1 and was expected to receive two major Android upgrades and three years of monthly security updates.
Essential delivered on Android 9 and Android 10, the same day as Google’s Pixel phones.
The hardware was also supposed to overcome Android’s challenges. The phone had a titanium frame and a ceramic back, and it was among the first smartphones to have a notch. It had magnetic pins on the back, which were supposed to allow accessories to snap onto the phone instead of using a USB-C port. Essential announced a 360 camera and an audio adapter, but the ecosystem was never realized.
The launch of the PH-1 did not go well for Essential. The company announced that the phone would be available for purchase within 30 days, but the first units were not shipped until August 25 th , nearly two months after launch. The camera was also heavily criticized, and the $699 price was permanently reduced to $499 only two months after its launch. The only US carrier that sold the Essential PH-1 was Sprint.
Essential’s sales were also underwhelming despite the star power of Andy Rubin.
A $300 million funding round in 2017 valued Essential at around $1.2 billion, but Bloomberg revealed that Essential had only sold 150,000 phones by May 2018.
In October 2018, The New York Times revealed that Google had investigated a sexual harassment complaint against Rubin and found the allegations credible. Google approved a $90 million exit package for Rubin, but he denied the allegations.
The report received a negative reaction from many Google employees, and Rubin’s reputation became a liability for Essential.
Essential also announced Project Gem, a tall and thin smartphone that was designed to be used with one hand. The phone never reached the market, and Essential filed for bankruptcy on February 12 th , 2020, after realizing that there was no viable way to bring the phone to the market.
The PH-1 was a lesson that high-end materials, limited software, and fast updates were not enough for a struggling smartphone brand to survive.
The phone’s troubled launch, limited accessories, poor camera, and lack of network support hindered its chances, and Essential was unable to turn it around. The company realized that its ideas were not scalable enough to sustain a smartphone manufacturer, and it filed for bankruptcy later in 2020.
