Essential Phone 2 Reportedly Canceled; Company Might Sell Itself Off

Essential Products Inc. has reportedly canceled plans of developing a second phone. The company that created last year’s Essential PH-1, or the Essential Phone, is also said to be considering selling itself off to another company.

Essential is said to have already hired the financial firm Credit Suisse Group AG to get some advice on a potential sale of the company, according to Bloomberg. People familiar with the matter also said that there’s already at least one bidder interested in buying Essential, but the final decision hasn’t been made.

Essential was co-founded by Andy Rubin, the creator of the Android mobile operating system. The company is part of Rubin’s incubator Playground Global and it was able to raise around $300 million from investors last year. The company was estimated to be valued at $900 million to $1 billion last year. It is believed that Essential spent more than $100 million to develop its products, including the Essential Phone. It received investments from Foxconn, which also helped in manufacturing the phone last year.

Rubin took to Twitter to respond to Bloomberg’s report, stating that Essential has “multiple products in development at the same time” and that it will be “canceling some in favor of the ones we think will be bigger hits.”

The Information was also able to obtain an internal email sent by Rubin to his employees. The company’s co-founder said that “no one (including me at this moment) knows what the best thing for the company will be.” He also said that Essential is “working with bankers to raise money” and that “we are not shutting down the company.” Rubin also lamented the Bloomberg article, stating that it “will not position us well for optimizing” fundraising effort.

The Essential Phone was announced on May 30, 2017 and was finally released around late August after a series of delays. The Essential Phone was the very first Android smartphone to feature a notch on its display, a design that is now more popular thanks to Apple’s iPhone X.

Although the Essential Phone garnered a lot of attention from consumers due to its unique design, the phone itself wasn’t a commercial success. The handset carried the original price tag of $699 and was also sold through Sprint. After just two months, the price of the handset went down to $499, according to Android Authority.

Essential has kept quiet on the device’s sales performance, but industry research firm IDC estimated that the company only shipped around 88,000 units by the end of 2017. Actual number of units sold remains a mystery, but it can be deduced that Essential may have only been able to sell less than 88,000 units.