Andy Rubin unveils Essential as LeEco slashes U.S. jobs

Essential founder and CEO Andy Rubin.

Android creator Andy Rubin is jumping back into the U.S. smartphone market just as the Chinese vendor LeEco is sounding the retreat.

Rubin this morning unveiled Essential, his first project since leaving Google in 2014. The company’s first phone, the Essential PH-1, is a high-end, Android-powered gadget positioned to compete with Google’s Pixel and Samsung’s new Galaxy S8: The $700 modular handset is sold unlocked and features a Qualcomm Snapdragon 835 processor, 128 GB of internal storage and a 360-degree camera that can shoot spherical UHD images at 30 frames per second.

The phone is made of titanium and ceramic and notably lacks any logos. The company began taking preorders for the device today.

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“Devices are your personal property. We won’t force you to have anything on them you don’t want to have,” Rubin wrote on the company’s blog. “Devices shouldn’t become outdated every year. They should evolve with you.”

Meanwhile, CNET reported last week that the Chinese vendor LeEco was slashing 325 jobs, or 70% of its U.S. workforce, due to a lack of funding. The company will maintain its U.S. operations, CNET reported, but will hone its focus on Chinese-speaking households.

LeEco made headlines in the United States last year as it attempted to build a media empire across a range of hardware platforms. The 7-year-old, Beijing-based company scored $600 million in funding in November, and Strategy Analytics predicted late last year that LeEco would ship 25 million smartphones this year, marking a 541 percent increase over 2015.

But the U.S. smartphone market has struggled in recent quarters as penetration rates have reached the saturation point. Shipments declined by 4% year over year in the first quarter of 2017, according to Strategy Analytics, underscoring stalled demand as upgrade cycles continue to slow.

And while Essential’s new phone may be compelling, the company faces a stiff challenge as it targets high-end users in the U.S. Apple is reportedly preparing to launch a dramatically redesigned new iPhone later this year, and Samsung appears to have regained its footing with the Galaxy S8 following the disaster that was the Galaxy Note 7.

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