March 20, 2017

The Next Web

Essential, the tech startup lead by Android co-creator Andy Rubin, may have hit a bit of a bump in its road to launch a new high-end smartphone. A new report claims that Japan-based Softbank has decided not to invest $100 million in Essential. The deal was reportedly in the works for months, and even the final investment contracts were being created before the deal was scrapped. The deal would have also included help by Softbank to launch the smartphone in Japan.

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What happened? According to The Wall Street Journal, citing unnamed sources, part of the reason for the pullback was due to a possible conflict of interest. SoftBank’s CEO Masayoshi Son is planning to launch the tech-focused Vision Fund investment group with $100 billion later this year, and Apple has announced it will put $1 billion of its own money into this fund. Son apparently felt that investing $100 million into Rubin’s Essential startup would not be a good idea due to Softbank’s relationship with Apple.

There’s also the issue of Softbank’s ownership of ARM, which was finalized a few months ago. It’s possible that Son did not want to annoy other companies that use ARM-based processors like Samsung, LG and others by investing in a potential rival like Essential.

Rubin’s reported plans for Essential leaked earlier this year. The company is rumored to be developing a number of connected hardware devices, centering on a high-end Android smartphone with an edge-to-edge display, and a possible way to add new features similar to Motorola’s Moto Mods.

The smartphone from Essential could launch as early as this spring

It’s unknown how much Rubin and Essential was counting on Softbank’s money to help fund and launch its smartphone, which The Wall Street Journal claims could happen as early as this spring. Another report from Business Insider claims that the startup is about to close on over $100 million in funding from unnamed major investors. It’s possible that investment round will help make up for Softbank’s pull out.

These reports show that even a startup lead by Android’s co-creator will face its share of obstacles before it launches its first product. It will be interesting to see if Essential will be able to compete with the upcoming Samsung Galaxy S8 and the rumored iPhone 8 from Apple, both of which will also reportedly have large edge-to-edge displays.

John Callaham
John was a newspaper reporter before becoming a technology and video/PC gaming writer in 2000. He lives in Greer, SC with his wife and five cats.
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