Essential, a startup founded by the Android creator, Andy Rubin has axed development of its upcoming Essential Phone 2, according to a Bloomberg report. The company now is considering selling itself and has “cancelled development of a new smartphone,” people familiar with the matter said. The startup has reportedly hired Credit Suisse Group AG to advise on a potential sale and has received interest from at least one bidder already. Essential is now “actively shopping itself to potential suitors,” insiders told Bloomberg.
The Bloomberg report adds the current discussions are ongoing for sale of the entirety of Essential’s operations. This will include its patent portfolio, hardware products like the original phone, the upcoming smart home device called Essential hub along with the 360-degree camera attachment for the phone. Essential’s team which includes talent hired from Apple and Alphabet, Google would also likely be part of a deal. The company hasn’t yet made a final decision on a sale, the people said.
Not long after the latest report, Andy Rubin seems to have confirmed that the Essential Phone 2 indeed has been shelved. “We always have multiple products in development at the same time, and we embrace cancelling some in favour of the ones we think will be bigger hits,” Rubin tweeted. “We are putting all of our efforts towards our future, game-changing products, which include mobile and home products.”
Rubin gave more insight into the ongoing process in an email to employees obtained by The Information. “No one (including me at this moment) knows what the best thing for the company will be,” the email reads. Rubin went add that Essential will not shut down and that company is “working with bankers to raise money”.
Rubin comments suggest that Essential brand may still live on. The company is also looking to partner with another device manufacturer, which would create a phone using the Essential brand. It currently works with Foxconn, the manufacturing arm of Hon Hai Precision Industry Co. which is an investor in Essential.
Rubin, who left Google back in 2014, launched Essential with his Playground Global and started selling its first product, the Essential Phone in May last year. The smartphone proved groundbreaking as it was among the first to launch with an edge to edge display and screen notch ahead of iPhone X. However, the phone failed to live up the expectations as the company is said to have sold just 150,000 phones to date.