Andy Rubin. Photo: Essential

How hard is it to crack into the smartphone market? Even the father of Android can't seem to do it.

The bottom line: Rubin's plan was to start with a smartphone and then quickly expand into smart home and other consumer electronics products. But as I cautioned at the time, the smartphone market is brutally competitive. By starting with a phone, Essential was risking not being able to get to the next part of the plan.

  • Bloomberg reported Thursday that Andy Rubin's Essential has scrapped plans for a second smartphone and is exploring a sale of the company. Essential didn't confirm the sale talks but did say it has canceled some planned products.
  • Essential debuted its phone almost exactly a year ago after raising nearly $300 million from investors including Foxconn, Redpoint and Tencent, in addition to Rubin's Playground incubator.

Flashback: Here's what I wrote in August of last year: Starting with a smartphone, Rubin says, lets Essential kickstart the business by starting with a well understood and huge category.But, in starting there, Essential is diving into a brutally competitive and demanding market, meaning that a lot of energy is going to be going in that direction.

Why it's so tough: Even the most innovative of smartphone startups these days is building on Android, putting a realistic limit on how different it can really be than competitors. Nearly all the industry's profits go to Apple and Samsung with the remaining market share being divvied up in a brutal battle that includes a number of Chinese vendors Huawei, ZTE, Xiaomi, Vivo and Lenovo as well as Korea's LG Japan's Sony and others.

What's next: Bloomberg reported that Essential has engaged Credit Suisse to look at financial options. The Information reported Rubin e-mailed staff after the report to say that the company was in the process of trying to raise more money, and that the leak wasn't helping matters.

  • Meanwhile, a source says the company is putting its energy behind non-smartphone products where it feels it can better stand out from rivals.

My thought bubble: For an upstart to really crack the smartphone market, they'll probably need to have something as different from today's iPhone and Android as the iPhone was from the BlackBerry over a decade ago.

Go deeper

Trump's new TikTok threat

Photo illustration: Aïda Amer/Axios. Photo: Jim Watson/AFP via Getty Images

President Trump said twice Monday that the U.S. Treasury would need to get a portion of the sale price of TikTok, as a condition of regulatory approval.

Why it matters: This is akin to extortion — the sort of thing you'd expect to hear on a wiretap, not from the White House in front of reporters.

Ford names James Farley as new CEO amid ongoing turnaround effort

James Hackett, left, is retiring as Ford CEO. Jim Farley, right, takes over Oct. 1. Photo: Ford

Ford announced Tuesday that James Farley will take over as its next CEO, replacing James Hackett, 65, who is retiring after three years in the job.

Why it matters: It leaves Farley to complete the company's ongoing turnaround effort. The transition will be that much harder as the industry tries to navigate the coronavirus-induced economic slowdown which shuttered Ford plants for two months on the eve of some of its most important vehicle launches.

Updated 3 hours ago - Politics & Policy

Watch the full "Axios on HBO" interview with President Trump

In this episode of “Axios on HBO”, President Trump discusses his handling of the coronavirus pandemic, the upcoming election and much more with National Political Correspondent Jonathan Swan.

The interview was filmed on Tuesday, July 28 and aired Monday, Aug. 3 on HBO.