Essential Products Inc., the smartphone hardware startup founded by Android creator Andy Rubin, is shutting down.

The company said it would cease business operations because it has “no clear path” to delivering its next products to customers.

Rubin launched Essential around three years ago amid much fanfare thanks to its concept of a modular next-generation, “future proof” smartphone to rival the leading handsets from more established Android brands such as Samsung Electronics Co. Ltd. and Sony Corp.

The company’s first phone, the Essential PH-1, debuted in the summer of 2017, but it quickly became apparent that neither the device, nor sales, were going to live up to expectations. For one thing, the phone didn’t really offer anything that could set it apart from more established models such as Apple Inc.’s iPhone or Samsung’s Galaxy series. Moreover, it was expensive at $700, which doesn’t compare well with cheaper Chinese brands such as the OnePlus that come with similar specifications and features.

The Essential PH-1’s main differentiator was its modularity, coming with a magnetic connector that allowed for add-ons to be attached to the device. However, the company only ever built one such add-on, a 360-degree camera that somehow failed to set the world alight.

Poor sales led to Essential cancelling plans for a second smartphone one year later, and there were even rumors that the company was trying to sell itself. That didn’t happen, and instead in 2019 the company released images of a new, ultraslim concept smartphone called Gem, which ran a customized version of Android.

But unfortunately for the few Essential fans who may have been waiting for that device to hit the shops, it’s not going to happen. In a blog post today, the company said it has “taken Gem as far as we can, and regrettably have no clear path to deliver it to customers.”

“Given this, we have made the difficult decision to cease operations and shut down Essential,” the company’s statement continued. “We are incredibly grateful to our employees in Palo Alto and Bangalore as well as our global partners for their help and dedication bringing this concept to life.”

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that Essential’s failure is yet more evidence of the lack of innovation that has plagued the smartphone industry in recent years.

“If someone with the reputation, connections and resources of Rubin cannot sway the Apple and Android fandom, that shows just how hard it is to find new ways to innovate in the computers in our pockets,” Mueller said.

Essential’s inability to innovate is even more glaring considering how much money the company had at its disposal. The company had raised almost $330 million in venture capital funding from investors including Amazon.com Inc., Tencent Holdings Ltd. and Hon Hai Precision Industry Co. Ltd.

Essential was able to raise so much cash thanks to its association with Rubin. But its cause wasn’t helped when the Android creator became mired in controversy following a 2018 report in the New York Times that highlighted his alleged sexual misconduct while working at Google LLC. Those allegations were swept under the rug at the time, though they were one of the main reasons for his exit.

The closure of Essential means the company will no longer be supporting its PH-1 smartphone. A security update issued for the handset on Feb. 3 will be its last, as there will no more updates or customer support. In addition, Essential is also shutting its Newton Mail email client, which was acquired in 2018.

Image: Essential