“SoftBank Group Corp. scrapped a planned $100 million investment in a smartphone startup founded by the creator of Google’s Android software, partly because of the Japanese investor’s increasingly close relationship with Apple Inc., according to people familiar with the matter,” Rolfe Winkler reports for The Wall Street Journal.
“The planned investment would have valued the startup, Essential Products Inc., at $1 billion, these people say, a lofty amount for a startup that has yet to sell a product in one of technology’s most cutthroat industries,” Winkler reports. “The offer banked on the pedigree of Essential’s founder Andy Rubin, who sold his previous startup, Android, to Alphabet Inc.’s Google in 2005, then helped turn its software into the world’s most used smartphone operating system, powering devices rivaling Apple’s iPhone.”
“As part of the proposed deal with Essential, Mr. Son had promised that SoftBank’s telecom subsidiary in Japan would provide a big marketing push for the release of Essential’s high-end smartphone, scheduled for this spring, the people said, ahead of Apple’s expected fall release of its 10th anniversary iPhone,” Winkler reports. “In January, Apple agreed to commit $1 billion to the Vision Fund. Though Apple didn’t block the Essential deal, according to the people, its investment complicated SoftBank’s interest in a competing smartphone company. In February, after months of negotiations and when final investment contracts were being drawn up, Mr. Son backed out of the deal.”
Read more in the full article here.
MacDailyNews Take: Smart move by Mr. Son.
Andy Rubin is nothing more than a reactionary mimic, and not a very good one at that. – MacDailyNews, October 31, 2014
“Holy crap! I guess we’re not going to ship that phone.” – Google’s Android chief Andy Rubin, moments after Steve Jobs unveiled the iPhone on January 9, 2007
Here’s what Google’s Android looked like before and after Apple’s iPhone:
Here’s what cellphones looked like before and after Apple’s iPhone:
SEE ALSO:
Former Android head Andy Rubin leaving Google – October 31, 2014
Why Google really, truly, deeply hates Apple – May 30, 2014
Prior to Steve Jobs unveiling of Apple’s iPhone, Google’s Android didn’t support touchscreen input – April 14, 2014
Before iPhone, Google’s plan was a Java button phone, Android docs reveal – April 14, 2014
How Google reacted when Steve Jobs revealed the revolutionary iPhone – December 19, 2013
Apple to ITC: Android started at Apple while Andy Rubin worked for us – September 2, 2011
Damn those bastards for buying out my ARMH! :/
Alternative explanation: Someone at Softbank got a clue.
(Do we really believe Apple had to “apply pressure” in this situation?)
1) the initial Android survived due to stolen tech.
Comments by Google engineers and court documents show that originally Android was a Blackberry clone (as photos show) and when Schmidt who was then on Apple’s board got wind of iPhone they desperately layered a ‘touch interface’ over the keyboard OS (No time to completely ‘redo’ the OS for launch) . That is why for the first few years Android phones even with more cores were more sluggish than iPhones as the interface wasn’t really designed for touch. (btw the more cores resulted in bigger phones due to need for more battery space… ).
2) Android didn’t make a lot of money for Google. For years Google made more money off iOS providing maps, search etc. Android clone makers overseas often loaded Baidu, Yahoo , Bing etc on their phones.
Not making money is why Andy Rubin got pushed (encouraged?) out of Google.
3) Android only survived because Android phone makers decided to go ‘cheap ‘ and thus make practically no profit. 75-90+ % (depending on who is counting) cell phone profits in the world are made by Apple.
I echo the comments above, why would anybody invest $100 million into Rubin to make phones? a few million in something else maybe (he’s reasonably smart) but phones are already a developed market and as I pointed out Rubin is no ‘genius’ at it.
Dave, write Cook and tell him he ought to invest in Rubin’s idea and get him “back in the fold” before an Indian company invests in Rubin.
Not saying Apple would put $100m in it, but Apple needs new blood at this point
I’m still amazed at how smaller Android smartphone manufacturers can manage to survive at this point. There’s just so much competition in terms of price-cutting. With Google promoting $50 smartphones it’s like pricing a smartphone against a carton of cigarettes. That’s just crazy from my point of view.
Google is clearly looking out for itself in terms of putting its services on those cheapie smartphones and the smartphone makers getting almost nothing out of it. I truly believe it’s good for consumers of poorer nations being able to get these low-cost smartphones but it just seems so darn cheap from a global perspective. Far too low a cost for Apple to bother with and keep its books balanced.
For India it’s toilets, health care and nutrition first and Android smartphones should be much further down the line. iPhones would seem to only have a tiny fit in that country.
I’m somewhat surprised Mr. Son would even bother with promoting Android smartphones due to Android devices not generating much in the way of profits. I would think it would be more beneficial for Softbank to continue putting most of its efforts into promoting iPhones. How much money would Softbank make from promoting a few high-end Android smartphones due to so much competition from other Android smartphone makers always trying to undercut prices.
Hey MDN.
Where does it say it was scrapped due to “Apple pressure”?