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OnePlus founder Carl Pei’s Nothing takes on Apple with Ear 1 earbuds

LONDON – The co-founder of the Chinese smartphone manufacturer OnePlus is challenging Apple with a cheaper alternative to the technology giant’s popular wireless earbuds.

Carl Pei helped develop OnePlus with his ex-colleague Pete Lau in 2013. OnePlus attracted a following by making cheap Android phones with attractive specifications. Pei left the company in October.

Now, Pei is back with a new hardware company called Nothing that aims to create a range of smart devices connected through an app. On Tuesday, the London-based startup unveiled its first product, a line of wireless earbuds called the Ear 1.

The headphones are “really wireless”, ie they are connected to each other without cables. They have active noise cancellation, similar to the AirPods Pro. But at $ 99, they’re a lot cheaper than Apple’s mid-range earbuds, which cost $ 249, as well as Samsung’s $ 200 Galaxy Buds Pro.

“We saw that the real wireless market grew pretty fast this year,” Pei, 31, told CNBC. “It felt like a place where we can make a difference.”

True wireless earbud sales reached 233 million units in 2020 and are projected to exceed 300 million units this year, according to Counterpoint Research.

Pei’s company faces tough competition. Apple made up almost a third of the market last year, while China’s Xiaomi and Samsung were the second and third largest players by market share.

However, Pei believes that most consumer technology today feels “cold” and believes there is ample opportunity for an aspiring player to break into the market.

“There’s a general lack of interest in consumer technology,” Pei said. “Instead, there are a lot of negatives about technology – tech companies are monopolistic, privacy issues and so on – and when you look at products it becomes more iterative and less fun.”

Design quirks

Nothing hopes that a few quirks in Ear 1’s design can help it stand out from the competition. For one, Nothing’s earbuds show the user the magnets attached to the case, which are usually hidden inside most wireless headphones.

The unusual requirement to make the magnets visible resulted in two Nothing factories separating because they were viewed as too small, Pei said.

The housing of the Ear 1 is also transparent and has a recess between the two buds to make it easier to hold.

Another unusual design choice with the Ear 1 is the lack of the letters “L” and “R” to indicate to the user which earbud is on the left and which is on the right. Instead, the right earbud has a red dot while the left one has a white dot.

According to Pei, the color “red” would translate as “correct” for many hardcore audio fans. For example, on RCA audio cables, red usually represents the correct audio channel.

Design quirks aside, nothing says the Ear 1 can play up to 5.7 hours of music on a single charge and up to 34 hours with its case – longer than the AirPods Pro. Each bud weighs 4.7 grams.

It comes with three different microphones, two of which collect ambient noise while the third focuses on the voice. Nothing says it also uses machine learning to block out different types of background noise.

The buds are connected to an app that has four different equalizer settings and three noise-canceling modes, Pei said.

Availability

A limited number of Ear 1 units will be shipping on July 31st, Nothing said, while open sales begin on August 17th. In the UK, the headphones will be available from the luxury Selfridges department store.

Nothing auctioned 100 limited edition engraved versions of the Ear 1 on the StockX marketplace last week, with one unit grossing a staggering $ 1,029.

The exclusive character of the Ear 1’s debut is reminiscent of old OnePlus phone launches, which were often by invitation only.

Nothing has raised over $ 20 million to date from investors like Alphabets GV, iPod inventor Tony Fadell, and YouTube star Casey Neistat. The company plans to raise funds again either late this year or early 2022.

Categories
World News

OnePlus co-founder Carl Pei’s new startup Nothing takes intention at Apple

OnePlus co-founder Carl Pei speaks on stage during TechCrunch Disrupt San Francisco 2019.

Steve Jennings | Getty Images for TechCrunch

LONDON – Carl Pei, co-founder of the Chinese smartphone manufacturer OnePlus, is restarting.

The Chinese-born Swedish entrepreneur founded a new consumer tech company called Nothing late last year. The company is expected to launch its first product in June, a pair of wireless earbuds called the Ear 1.

While the specs for Nothing’s headphones are not yet known, Pei suggests that they will be minimalist in terms of features. Instead of “20 different levels” of noise cancellation, Pei says, people only need a maximum of two or three settings. Nothing’s products will also have a “retro-futuristic” design, Pei said, adding that the company has spent a lot of time perfecting its design philosophy.

“We want to bring this element of human warmth back into our products,” Pei told CNBC in an interview.

“Products aren’t just cold electronics,” he added. “They are designed by people and used intelligently by people. It seems like product companies (today) are run by big companies.”

OnePlus co-founder Carl Pei’s new start-up, Nothing, announced the name of its upcoming wireless earbuds on Tuesday: Ear 1.

Nothing

Pei and his former colleague Pete Lau founded OnePlus in 2013. OnePlus, majority-owned by China’s Oppo, a subsidiary of Guangzhou-based BBK Electronics, has become known for making cheap Android phones with decent specifications. Pei left the company in October to start his new hardware company.

Pei hopes his new London-based company, Nothing, will shape the consumer tech industry in the same way that Apple’s iMac G3 rocked the PC market in the late 1990s and early 2000s. “Today is like the personal computer industry in the 80s and 90s where everyone was making gray boxes,” he said.

The 31-year-old tech entrepreneur said he was once Apple’s “biggest fan,” but “overall innovation has only slowed down a lot” in recent years.

Apple’s iPhone was a game changer that ushered in a move to touchscreen-based cell phones and apps that have grown into multi-billion dollar companies. However, some believe that the modern smartphone industry is stagnating, introducing minor updates every year, albeit at higher prices. Large companies are trying to freshen up smartphones with super-fast 5G WiFi and even collapsible displays.

“There is a general feeling, ‘Why should I update my technology?’ because each new generation is similar to the previous one, “added Pei. “In the past people were so optimistic about technology. But now people are indifferent. And there has to be a way to break the cycle.”

Apple declined to comment when contacted by CNBC. Apple has made a number of improvements to the iPhone over the years, including 5G and its powerful new A14 Bionic chip. Other recent product launches include new high-end iPads, colorful iMacs, and lost item trackers called AirTags.

Pei’s second act

Pei was born in Beijing and grew up in Sweden. He recalls that his uncle, who worked for Nokia, gave him old cell phones to play around with. Pei dropped out of college in 2011 to work in the Chinese smartphone industry. Now the entrepreneur is starting from scratch and targeting consumer tech giants like Apple and Samsung.

Pei’s new venture has been puzzling over the past few months, but he tried to generate a hype on Twitter with cryptic posts and raised $ 1.24 million from loyal crowdfunding investors in March.

Pei says he’s frustrated having to download different apps for each of his smart devices. Instead, he wants to build a technological ecosystem, all supported by the same software, and take a sheet out of Apple’s playbook.

“We see a future where technology is everywhere and nowhere,” said Pei. “The first step for us is to create an ecosystem of smart devices that seamlessly connect to each other.”

Uphill battle

However, it won’t be easy. Hardware is a notoriously tricky market.

“The first rule of hardware is that it’s known to be difficult – it’s complex and capital-intensive,” Tom Hulme, general partner at Alphabet’s Venture Capital Arm GV, an investor in nothing, told CNBC.

“If you make a mistake, it can have a devastating impact on the company,” Pei said. “A lot of investors shy away from it and there could therefore be less competition.”

Total sales of true wireless headphones – buds without wires – were 233 million units in 2020, with Apple’s AirPods accounting for nearly a third of the market, according to Counterpoint Research. Counterpoint predicts the market will grow 33% to 310 million units this year and expects Apple’s market share to decrease in competition with new entrants.

Nothing has attracted an impressive number of investors, including Alphabet’s GV, iPod inventor Tony Fadell, Reddit CEO Steve Huffman, and YouTube star Casey Neistat. The company is aiming to raise funds again later this year or early 2022.

“We have enough runway for a couple of years,” he told CNBC. “But I think we want to increase, maybe by the end of the year or the beginning of next year, when our first products are on the market or when our future products gradually become more definitive.”