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July 15, 2022

Why Nothing Phone (1) may struggle to compete in the smartphone market

Carl Pei, founder of OnePlus, launched Nothing into the European, Indian, and Chinese smartphone markets by unveiling the Nothing Phone (1).

The Phone (1) differentiates itself from other smartphones via the “glyph” interface on the back slab of the phone. This interface features a series of LED lights that can be programmed by the user to serve as a visual notification center. For example, a user can program different light sequences on the glyph via the settings app on the phone to correspond to different ringtones and caller IDs.

During his keynote, Pei highlighted that the glyph can be useful for discreet notifications during meetings or dinners. However, there is nothing discreet about a series of flashing LED lights. Moreover, users will struggle to find a case that can offer sufficient protection of the device without obstructing the glyph interface. As such, the glyph is more of a gimmick than a feature most consumers will want to use.

Nothing Phone (1) is a mid-range device

The device offers mid-range level specs and features. It comes with a 6.55 OLED display with 120Hz adaptive refresh rate, a 4,500mAh battery, and two rear cameras.

The phone adopts Nothing’s custom OS, called Nothing OS, taking a light touch on top of Android. The Nothing Phone (1) runs on Qualcomm’s Snapdragon 778G+ 5G chipset, a customized version of the Snapdragon 778 chipset, which has been tweaked for the device, offering exclusive features such as wireless charging and reverse wireless charging. The Phone (1) also offers a dedicated gaming mode.

Fierce competition in the sector

While Nothing’s smartphone may pose a threat to other smaller OEMs with mid-range smartphones, it will struggle to take market share from the bigger players in the same category, such as Apple and Samsung, as it cannot compete with their resources, features, brand awareness and loyalty, and integrated ecosystem of devices. Furthermore, as Nothing only offers one other product, its Nothing Ear 1 wireless earbuds, consumers could be incentivized to purchase an Apple, Samsung, or Xiaomi mid-range smartphone that offers integration into their respective ecosystem of products and services, for roughly the same price.

Nothing could also face headwinds from carriers as they will continue to push bigger brands’ smartphones that can be bundled with other devices within their respective ecosystems to encourage customers to purchase multiple products and services.

The Phone (1) is one of the most hyped smartphones of 2022, owing in large part to Pei intentionally leaking images of the device months prior to the official unveiling. All of the leaks focused on the design of the glyph interface to highlight the uniqueness of the phone while maintaining an air of mystery. Because of Pei’s marketing strategy, the phone had received more than 175,000 pre-orders before the specifications of the device had been officially announced. The device will be available later in July retailing for £399/€469 for the base model and £499/€569 for the high-end model in the UK and Europe. As hinted by Pei, the Phone (1) is not available in the US due to lack of carrier support.