Survival Essential(s): Android Creator Can't Afford Another PH-1 Debacle

While most smartphone companies are taking it easy over the holiday season and are avoiding talking about new products that are just around the corner while hoping to sell their existing inventories, if there's one thing Essential Products proved to date, it's that it isn't bothered by industry conventions. Just as Christmas festivities were coming to a close, the company announced that its first Android handset — the Essential PH-1 — sold out and won't be manufactured any longer, adding that it's already working on its successor. Its decision to kill its original product family is far from surprising; the PH-1 has been on the market for nearly a year and a half, enjoying a lifespan that's usually only reserved for ultra-premium and highly successful models from major manufacturers such as Samsung and Huawei. Yet it's not like the device has been in production for so long because of its popularity; on the contrary, it arguably overstayed its welcome by some margin, which is kind of ironic given how it was initially marketed as a gadget that will "fix" Android by combating some of the ecosystem's most prominent issues such as slow security updates and a phenomenon consumers often describe as "planned obsolescence," pointing to anecdotal evidence of electronics dying on them just as their warranty periods or carrier contracts come to an end.

Dead on arrival

And while Essential largely delivered on the software update front, it's hard to imagine a scenario wherein the PH-1 actually proves to have greater longevity than its peers. For a handset that debuted in late summer of 2017 with a $700 price tag, Essential's premier Android smartphone certainly didn't impress on most fronts. Qualcomm's Snapdragon 835 chip powering the smartphone was already almost a year old by the time the PH-1 became available for purchase, its camera was nothing short of comically bad and the firm took months to get it to a somewhat usable state, its modular nature ended up being just a gimmick seeing how only a handful of modules were actually released (with prices that weren't exactly cheap), its battery life was problematic at best and annoyingly inconsistent at worst, service reception was another issue many users complained about, and quality-of-life features such as wireless charging and 3.5mm headphone jack connectivity were nowhere to be seen. Even its promised software support cycle isn't anything to write home about and is on par with what Google, Nokia, and some other handset vendors such as Samsung (not accounting for entry-level devices) have already been doing for some time now, at least in regards to security updates. In overall, the PH-1 was a rather barebones, half-baked device, which wasn't exactly surprising given how it wasn't made by a major smartphone company but combined with its high price tag, its shortcomings were more than enough to leave the vast majority of reviewers with a bad taste in their mouth.

While Essential is a startup by every definition of that word, the overall public expectations of the PH-1 were far from low given how the company was founded by Andy Rubin, the co-founder of Android Inc. and one of the original creators of what's now known as the world's most popular operating system by annual device shipments, according to many industry trackers. To date, Essential raised some $330 million from high-profile investors such as Amazon and Tencent, with its valuation peaking at $1 billion, an impressive figure for an electronics-first firm that raised most of its funding before shipping a single product. Then again, the hype surrounding the PH-1 was hardly an unavoidable and undesirable consequence of Mr. Rubin's status; the veteran entrepreneur was more than happy to make himself the face of the company in order to build anticipation for what ended up being an underwhelming device. Ultimately, a marketing strategy can only take you so far if your core product has issues in regards to functionality, pricing, or availability, and the PH-1 didn't lack in any one of those departments. Faced with sales figures that were painfully low even for a startup, Essential permanently dropped the PH-1's price by $200 mere two months following its official announcement. The PH-1's commercial performance is unlikely to ever be disclosed publicly, though some analysts believe the handset was dead on arrival. On the bright side, most of the remaining PH-1 owners seem rather pleased with their handset today and are saying as much online but the overall sentiment regarding the phone only changed after around a year's worth of over-the-air fixes and optimizations.

The face rubbing that was promised

After the device went out of stock several days back and before the Palo Alto-based company confirmed a successor is in the works, its R&D head Jason Keats criticized media speculation about Essential being close to shutting down, saying those assumptions are only strengthening his eagerness to prove all doubters wrong and "rub their faces" in some unspecified success the company will announce in the future. "We aren't done, not by a long shot," he wrote on Twitter. While it's currently unclear what exactly Mr. Keats was referring to, anything short of a merger is unlikely to eliminate most doubts surrounding Essential's prospects. One mid-2018 report suggested the company was on the verge of canceling its second phone as Mr. Rubin was shopping for a buyer, which the firm declined to confirm whereas Mr. Keats himself claimed the startup had a "momentous day" in early November, with both of those developments being indicative of a potential ownership change, something that would certainly breathe new life into its operations and capabilities.

Last year, Mr. Rubin and other Essential executives were describing the PH-1 as just the first step in their vision of the future of consumer electronics that includes an entirely new OS and other gadgets such as smart speakers, though the latter project centered on an Amazon Echo rival called the Essential Home was put on hold this October. Coupled with some rather concerning misconduct allegations made against Mr. Rubin in regards to his time at Google that emerged in late 2017, the Californian startup hardly had a great start in the consumer electronics segment. All things considered, regardless of whether Essential's next product is a mind-reading smartphone or a flying broom that comes alongside a promise of five years' worth of security patches, the company can hardly afford to deliver another half-finished product and then spend the next year developing fixes that make it work as originally promised. Even if it managed to find a buyer or raise additional capital over the course of this year and regardless of the weight of Mr. Rubin's name, not even the Silicon Valley's patience is endless, especially when it comes to highly competitive industries such as consumer electronics.

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