Why Is Amazon Backing Android Creator Andy Rubin’s Start-up?

Why Is Amazon Backing Android Creator Andy Rubin’s Start-up?
<a href="https://pixabay.com/users/kirstyfields/">kirstyfields</a> / Pixabay

Amazon is the latest firm to support Essential Products, the startup from Android-creator Andy Rubin. The start-up, which is preparing to release a new smartphone, has raised $300 million in its latest funding round. The company has entered into a partnership with retailers to sell its device, notes Reuters.

A daunting task ahead for Essential Phone

Essential Products’ first smartphone, which will cost around $699, will face off with Samsung and Apple in the coming holiday season. Amazon will be one of the retailers to sell the phone in addition to other retailers such as Best Buy, Telus in Canada and Sprint in the United States.

For now, reports suggest that the smartphone will have a titanium and ceramic case. Even before its launch, the Essential smartphone has created a lot of buzz. The phone will apparently have a unique design to increase the area of the screen. Further, leaks and rumors suggest that the phone will have minimal bezels.

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Andy Rubin, who founded Essential Products in 2015, hopes that the new phone will combat the duopoly in the smartphone market by offering customers something unique and simple. Rubin does not want customers to rely on dongles and connectors anymore but aims to develop a technology to get different eco-systems such as Android, iOS and Alexa, to work with his company’s operating system. The idea is to make all the electronic devices work together.

Whether the specifications of the phone will be good enough to take on Apple and Samsung will be interesting to watch. However, Bob O’Donnell of Technalysis Research thinks that standing up to the iPhone and Samsung’s smartphones is extraordinarily challenging, notes Reuters.

“The initial specs of the phone look good, but not necessarily unique. There’s no brand,” the expert said.

What interests Amazon in Essential Products?

Access Technology Ventures led the funding round for Essential Products, bringing the total investment raised to $330 million. Apart from Amazon, other big names that participated in the funding round include Tencent Holdings and Foxconn.

Essential Products is developing a smart home hub, which explains the interest that Amazon (or more specifically, its Alexa division) has in the start-up. In addition to its smart home hub, Amazon might also be looking to strengthen its position in smartphones, as its earlier efforts with the Fire phone were not that successful.

Amazon launched the Fire phone in 2014 and pitted it against the likes of Apple. Even though the phone was packed with a 360-degree screen and facial recognition technology, customers did not seem to be impressed in it, forcing the company to take a $170 million charge on its balance sheet from unsold inventory.

Paul Bernard, director of corporate development for Amazon’s Alexa Fund, said the company is keen to collaborate with Essential.

“Essential Products has a compelling vision and roadmap for connected devices that integrate voice technology in novel ways. We are excited to see Alexa become part of that vision where interacting with technology is simple, helpful and creates an interface that others can build on and innovate,” Bernard said.

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