Amazon’s Alexa Fund and China’s Tencent Holding’s have contributed to a $300 million fundraising for Essential Products, a smartphone developer whose first phone, the PH-1, is not yet available but hotly anticipated because the company was founded by Android creator Andy Rubin, according to CNBC.
Essential’s PH-1, which runs the Android OS, can be pre-ordered now, and will run in the U.S. exclusively on Sprint’s network. It also will be sold by Amazon and Best Buy, according to Engadget. The phone is made of titanium and ceramic, has an edge-to-edge screen and interfaces for accessories such as a 360-degree camera also developed by Essential.
The amount of money invested by Amazon and Tencent have not been made public. Amazon’s investment in a smartphone-making start-up follows its own failed attempt to sell a Fire smartphone back in 2014.
This funding news follows reports that surfaced back in June suggesting that Amazon was planning a re-entry into the smartphone market after the Fire fiasco of a few years ago. However, those reports hinted that Amazon was working on a project, dubbed "Ice," that would result in a smartphone for emerging markets such as India. This investment appears to be unrelated, although both the rumored Ice project and the Essential investment suggest that Amazon is casting about for one or more ways to participate in the smartphone market.
The CNBC report tied Amazon's interest in Essential to the possibility of getting its Alexa virtual assistant pre-installed on the device. That would represent a different kind of smartphone strategy for Amazon, an appropriate one given Alexa's growing popularity and also a less risky move than developing its own phone again. Plus, it can latch on to a renowned figure in the market in the form of Rubin.
However, it would not be a move without risks. The original Fire smartphone has a price tag starting at $199, while the Essential PH-1, at $699, is aimed at the premium end of the market. Amazon also is betting on a new entrant in a highly fragmented smartphone market, where anyone not named Apple or Samsung struggles to make much of an impact. While it is not clear if Google Assistant is incorporated into Essential's phone, many Android smartphones do have it, which would mean Alexa wouldn't have this device all to herself.
Finally, there is one other angle to this investment worth noting. Essential also has plans to produce a smart home device that sounds similar to Amazon's Echo and Google Home. Not much is known about that device, but it seems like that's another place where Alexa could find a home.