SoftBank Group scrapped a planned $100 million investment in former Android chief Andy Rubin’s startup Essential Products, in part because of SoftBank’s relationship with Apple, according to The Wall Street Journal.
Rubin’s startup has reportedly been working on a high-end smartphone that would compete with iPhone 7 pricing. SoftBank was also talking about marketing the new phone. But Apple later committed $1 billion to SoftBank’s Vision Fund, which “complicated” the Essential deal.
It wasn’t clear if the $100 million slated for Rubin’s company was coming from SoftBank itself or the Vision Fund. The report said Apple didn’t actively seek to block the Essential deal, but Softbank Chairman and CEO Masayoshi Son’s increasingly close relationship with Apple apparently made him reconsider it.
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Bloomberg reported in January that Rubin, creator of the Android operating system, was planning to combine his background in software with artificial intelligence to produce consumer hardware. With a crew of about 40, including recruits from Apple and Alphabet’s Google, Rubin was said to be preparing Essential to compete in multiple consumer hardware products, including ones targeting the mobile and smart home markets, the report said, citing people familiar with the plans.
SoftBank announced in October that it would form a Vision Fund with the Public Investment Fund of the Kingdom of Saudi Arabia and invest at least $25 billion in it over the next five years. Around that same time, SoftBank, which owns Sprint, also said it would invest $50 billion in the U.S in an effort to create 50,000 jobs.
Meanwhile, SoftBank has invested $300 million in shared-office space company WeWork, the WSJ reported. WeWork rents desks and office space to entrepreneurs, freelancers, startups and others that want temporary work areas.