Essential slashed the price of its flagship phone in a move that highlights the cutthroat competition in the U.S. smartphone market entering the holiday shopping period.
The startup, which was launched earlier this year by Android founder Andy Rubin, lowered the price of its only phone to $499, knocking $200 off the device. The discount comes in the form of a “friends & family code” that can be applied to the purchase of another Essential handset or the purchase of its 360 Camera, a modular add-on.
“We want to make it even easier for you to experience our products and brand,” Essential said on its website. “So starting today we’re offering Essential Phone for $499 on Essential.com.”
Essential has attracted a significant amount of attention primarily due to Rubin’s tech-celebrity status—the company was highlighted as one of FierceWireless’s 15 most notable startups earlier this year, and has raised $330 million—but the phone may have stumbled out of the gate despite garnering generally positive reviews. Sprint has exclusive carrier rights to sell the phone in the United States, but BayStreet Research said last month the carrier had sold only 5,000 units since its launch a few weeks earlier.
The company’s Essential PH-1 is a high-end, Android-powered mobile phone featuring a Qualcomm Snapdragon 835 processor and 128 GB of internal storage. It is made of titanium and ceramic, with magnetic modular add-ons, and notably lacks any logos. It went on sale last month through Sprint after a delay of more than a month.
But Essential’s debut comes amid a particularly competitive market for high-end smartphones in the United States. Apple recently released the iPhone 8 and will soon launch the iPhone X; Samsung’s new Galaxy Note 8 is receiving rave reviews; and Google recently introduced the second generation of its flagship Pixel phone. So Essential’s debut phone may be facing stiff headwinds, particularly given Sprint’s exclusivity.
“Essential PH-1 drops to $499 unlocked,” Ken Hyers of Strategy Analytics noted via Twitter. “Big drop for one of the best Android phones available. Indicates weak sales.”