Carl Pei thinks there is something wrong with the smartphone industry. That’s not to say the handsets on sale today are bad. Across the board, modern cell phones are faster, more advanced, and take better photos than previous generations. But like many tech enthusiasts, Pei is starting to feel that new phones aren’t as special as the devices that came out five or ten years ago. So ahead of the Phone 1 launch on July 12 (pre-orders start today), I sat down with the founder and CEO of Nothing to learn how the mobile startup is trying to bring in some innovation, whimsy, and maybe even a bit of fun back to the smartphone market.
Now there’s a logical explanation for why recent phones don’t have the same wow factor. When the iPhone made its debut, it felt like a revelation. “I used to watch all the launches. I was in Sweden, so I stayed up until midnight or 4 am to see what would come out,” Pei said. But in recent years, that excitement has waned, with Pei often skipping big keynotes and relying on succinct summaries to stay informed. And it’s not just Pei who feels this way.
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“When I talk to consumers, they’re also pretty indifferent,” Pei says. “When conducting focus groups, some consumers said they believe smartphone brands purposely withhold features just to launch something for the next iteration, which isn’t true. But if consumers feel that way, it’s a sign that they are a little bored.”
The big problem for Pei is stagnation. Now that big players like LG and HTC have left the market or become irrelevant, the smartphone industry is dominated by a handful of big companies like Apple, Samsung, and Google. “You have a few big companies, and the way they work is more structured and systematic,” Pei says. “They have technology roadmaps from partners like Qualcomm, Sony, or Samsung Display, so they know what’s coming. They do a lot of consumer research, get their feedback, andy look at their competitors and the general market landscape.”
However, Pei believes that this approach leads to a lot of equality. “So they have this information, they analyze it, and then they create a very rational product that’s going to do well on paper because they’ve used all this great data,” Pei said. “But the problem is that everyone uses the same data and analysis. So if the input and method are the same, the output is more or less the same.”
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Pei is trying to change that with Nothing’s upcoming handset, the Phone 1. Rather than trying to reinvent the wheel – or in this case, the phone – Pei wants to bring some originality back to mobile technology design. “Maybe we can take the brain down a bit and crank up the intuition,” said Pei, a mantra that has led to some of the Phone 1’s more unique features, including its design, built-in lighting, and glyph interface.
Pei says the inspiration behind the Phone 1’s design comes from a concept the team describes as “raw technology meets human warmth,” or technical warmth for short. “It has this machine-like character, but also has quirky and very human elements.” That’s why instead of hiding the device behind an opaque back like you see on so many other phones, nothing uses transparent glass that exposes components like the phone’s wireless charging coil 1, heat pipes, and more. It feels like a modern industrial take on the Game Boys and iMacs with clear plastic cases that we got in the 90s and early 2000s.
“One of the things we’re trying to achieve is to take people back in time to when they were more optimistic about gadgets,” Pei says. This desire to make tech fun again carried nothing through the entire design process, right down to Phone 1’s codename Abra, a reference to the paranormal Pokemon of the same name. (For the record, Pei says his favorite “Mon is Squirtle.”) There are other quirks, too, like the heat pipe on the bottom of the phone that looks like an elephant and the red indicator light on the back that lets people know when a video is being recorded.
See if you can spot the elephant hidden in the Phone 1 design.
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While Pei wants to bring the fun back to gadgets, Nothing always falls back on the core design principle of forming the following function. Pei said, “We don’t do ornaments. We can design different and unique things, but they must always be functional.” The best example is the Phone 1’s glyph interface, which uses 900 LEDs arranged across the back of the device to create a sophisticated notification system different from what’s out there now.
Allowing owners to assign unique combinations of light and sound to different contacts aims to enable people to see who is calling or texting without looking at the screen. Even the Phone, 1’s ringtones, evoke old-fashioned analog synths combined with the sound of a dial-up modem; it’s both fresh and retro at the same time. Plus, the lights glow when the phone is on wireless or reverse wireless charging, while the small strip of LEDs next to the charging port can show you how much juice the phone has — again, without ever seeing the screen.
That said, having big phone design ideas and making them happen are very different. Making phones is hard, and trying to get into the market as a startup is damn near impossible. If you look at the industry today, the only company that has made it through in the past decade is OnePlus, which was co-founded by Pei and received significant backing as part of BBK Electronics’ tech umbrella. Meanwhile, the scrap heap of failed smartphone startups is littered with ambitious companies like Essential (whose branding and IP are now owned by Nothing) that teased equally great ideas but reared their heads before ever making a second-generation device. Or think of more mainstream companies like Motorola, which failed to make modular phones more than a novelty with its Z-series devices. And since then, Moto has largely played it safe by running endless iterations of its G-series line.
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“This industry is so difficult because it requires end-to-end capability,” Pei said. “If you want to build a smartphone company, every team has to be at least seven out of ten. And some have to be even better if your product stands outsomehowy.”
“Your supply chain team must be great. Your mechanical engineering, your software, engineering, your industrial design, your sales, your marketing, your customer support,” said Pei. And when we look back at the PH-1, which had an innovative design and a team of serious pedigrees, a handful of issues, such as the high price and poor camera quality at launch, ultimately killed Essential.
On the other hand, despite Pei claiming that Nothing has already sold over 560,000 pairs of Ear 1 earbud, there are concerns that the Phone 1 is being overhyped. Some online commentators have even compared Nothing’s community forums to a cult based on early reactions to an unreleased device. But when it comes to hype, Pei feels there is only one road to success.
“One of them is the path we are currently taking. We try to create maximum interest for a product at launch. That sets high expectations of the product to be delivered. And if so, it’s going well. If not, it might be a piece of cake.”
Pei said, “On this path, at least we can try and deliver a great product. The challenge, however, is that if a company tries to dominate the hype, the product may never take off, regardless of quality. The second option is that if a small business with no marketing budget, nobody knows about your device. So even if the product is good, its result still no one cares. You don’t even have a chance to prove yourself. This is our only logical option.”
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So while the Phone 1’s design is unique and eye-catching, Pei preaches a pragmatic approach. Rather than take a huge blow out of the gate, Pei wants to gradually grow Nothing’s business and ecosystem, starting with his first earbuds and phone.
“We are a fast follower. We didn’t invent smartphones. We didn’t invent Android, but we have experience in this market. We see ways to improve, and there are some gaps in the market.” But Pei knows that nothing has to take it one step at a time. “We have to build a strong position gradually. Then when you’re strong, you can do something very innovative because you have a company that’s stable enough to take a lot of photos.”
While the Phone 1’s success (or failure) has yet to be determined, I appreciate that Pei is not only challenging multi-billion dollar giants with a new smartphone startup, but nothing is trying to shake things up. “I think this device is the start of something else, but it’s also a gift to our industry,” Pei says. “We are not saying this is a revolutionary product that will change the entire industry overnight. But maybe it will plant a germ in people’s minds.” Pei hopes the Phone 1 will encourage customers to demand more creative devices and encourage larger companies to take more risks in a sea of similar glass bricks. “Some of it will fail. But in the end, the smartphone market will be much more dynamic, and we as an industry will improve faster.”
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