Smartphone startup Nothing tries to stir market out of ‘sea of sameness’ with $400 phone

BARCELONA — British smartphone startup Nothing on Tuesday debuted a new handset it hopes can shake the mobile industry out of a perceived innovation slowdown.

Nothing launched its new Phone (3a) device, a budget phone that comes with an unusual design featuring multiple different shapes and so-called “Glyph” lights on the back that light up to preset ringtones and notification sound effects.

The Phone (3a) will retail at a starting price of £329 — or about $414 — while Phone (3a) Pro, a souped-up version of the device with better camera features, will start at £449.

The Nothing brand was founded in 2020 by Carl Pei, a co-founder of Chinese smartphone brand OnePlus, with the aim of bringing some “warmth” back to consumer tech products.

“In the past, people were so optimistic about technology. But now people are indifferent. And there must be a way of breaking the cycle,” Pei told CNBC in an interview in 2021.

Pei’s old company OnePlus gained something of a cult following in its early days, thanks to its focus on designing slick and affordable Android handsets and garnering buzz through unconventional marketing tactics.

Pei appears to be gunning for the same kind of appeal with Nothing. In the leadup to Phone (3a)’s launch, Nothing put out a video that depicted a humanoid robot — made by Norwegian startup 1X — unboxing the device and holding it up.

Ben Wood, chief analyst at market research firm CCS Insight, applauded Nothing for “trying to do something different” to combat what he called the “sea of smartphone sameness.”

“Bottom line, if you want to sell phones in this more affordable segment, you have to have something that stands out from the crowd,” Wood told CNBC.

The Phone (3a) has a triple camera system on the back, which includes a 50-megapixel main lens with optical image stabilization to avoid any shakes and blurs, a 50-megapixel telephoto lens for enhanced zooming and an 8-megapixel ultrawide lens from Japanese tech giant Sony.

The gear ships with Qualcomm’s Snapdragon 7s Gen 3 processor for smartphones. That marks a shift from the MediaTek Dimensity 7200 Pro chipset, which Nothing used in its Phone (2a) last year.

Besides a nifty design and impressive camera features, there’s not an awful lot else that separates the Phone (3a) from most other phones. It’s similar in shape to an iPhone and offers exactly what you’d expect from many other handsets available on the market right now.

In terms of unit sales expectations, Wood said Nothing doesn’t have the kind of scale to sell millions of phones like some of its larger competitors including Apple and Samsung, and that “hundreds of thousands of units” would be considered a success for the sales of its latest product.

“Nothing have a business where they run a lean organization and they have to in order to have a viable business,” Wood said. Nothing says it’s sold more than 7 million products to date — including its Ear wireless earbuds — with cumulative revenue topping $1 billion in 2024.

Wood argues that Nothing will have to be “extremely price competitive” given how much it’s targeting the Indian market, too. In January, Pei said Nothing was now the fastest-growing smartphone brand in India, achieving 557% year-over-year growth in 2024.

Notably, Nothing said that its pricier Phone (3a) Pro model won’t be available for orders in India. The company’s co-founder Akis Evangelidis plans to move to India to head up operations there later this year.