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Essential Aims To Become A Necessary Part Of Consumers’ Mobile And Home Lives

After developing the successful Sidekick and heading up development of the Android operating system, Andy Rubin is attempting to shake up the staid smartphone market with the Essential Phone. Essential is aiming to address the higher-end of the smartphone market and take share away from both Apple and Samsung by attempting to improve on the hardware and software features of both companies’ phones.

To address iPhone users who expect high-end hardware quality, Essential is aiming to one-up Apple with a design that incorporates a true edge-to-edge screen, a nearly ruggedized shell, and the idea of modular accessories that can be added via magnetic connectors rather than USB-C or lightning bolt connectors, which may or may not be around for a few more generations. Like the latest iPhones, the Essential phone has no headphone jack – an odd choice given the flack Apple received for removing theirs.

To address Samsung users, the Essential phone builds off the latest Android OS (Nougat) to deliver its own Ambient OS. The theory is that a transition from a Samsung or LG device to an Essential phone shouldn’t force a steep UI learning curve.

The U.S. smartphone market is due for some innovation. It’s been some time since consumers were genuinely excited about a new device, as the improvements and updates made have been incremental rather than substantial. There are, of course, rumors and speculation about the forthcoming iPhone 8 and its potential to be a game-changer. But as of yet, we have no details and only hearsay about an OLED screen and AR capabilities. We also don't have any details around a release date, which could be as early as this fall, or possibly pushed to next spring.

North America Smartphone Shipments Vendor Breakdown

The lower-end of the smartphone market in the U.S. is already getting crowded, with ZTE, Huawei, HTC, and others all growing share as consumers begin to realize through installment plans that the high-end phones are really quite expensive. Where these phones are succeeding is on price vs. performance as many consumers realize that, although smartphones have tremendous capabilities, they perhaps use only 20-30% of those capabilities on a daily basis. So, why pay more?

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Meanwhile, Samsung is still dogged by the residue of its Galaxy Note 7 debacle. Although the S8 has been generally well-received and well-reviewed, it hasn’t added a significant number of innovative features beyond the edge screen.

The result of this perceived lack of innovation is a predictable rate of smartphone sales, but also the realization that a truly innovative product aimed at mid-high-end users hasn’t hit the market in some time.

Where things get interesting for Essential—beyond the phone—is the idea of coming to market immediately with a home-mobile ecosystem tied together via a shared OS. There is actually more room for innovation in the home environment than there is in the smartphone market. The Essential phone might just be a Trojan horse product for the company to focus its efforts on making it easier to enable IoT in the home which is a confusing and complex environment of competing standards, radio access technologies, and operating systems.

Although Amazon’s Alexa and Google Home have done a good job of introducing families to IVR-based artificial intelligence and home control, we are still in the very early stages of combining those capabilities with video displays. Amazon’s Look is the first to address the need. But Essential’s Home product has the opportunity to take share if it provides an easy and intuitive way to access AI and deliver complete home control.

So, when it comes to the Essential Phone in its current format, the consensus is that it is going to have a very hard time gaining any traction in the North American marketplace. It is different, but not radically different enough to be able to generate the buzz necessary to eat into the dominant share of Apple and Samsung. However, the Home product may help provide some market traction and name recognition while the next iteration of the phone is developed and improves on some of the deficiencies noted in the first generation device.

Smartphone consumers are loyal to their devices, especially now that the days of service provider subsidization are over and consumers must bear the full cost of the device. Because of that, any new entrant has to have a device that ensures an easy transition from the existing device and offers enough value and functionality to warrant a switch. At this point, Essential doesn’t have that combination.

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