Seven years after co-founding OnePlus, Carl Pei left the smartphone maker in 2020 to start his own venture. The company that became Nothing has so far launched one product: the Ear (1) transparent earplugs. But it looks like the director is gearing up for a return to the industry where he made a name for himself.

Nothing has been working on a smartphone for over a year and plans to announce it next month, a source with direct knowledge of the matter told TechCrunch. According to a source close to the company, the entrepreneur showed off a prototype of the device in meetings with several key industry executives during this week’s Mobile World Congress event in Barcelona. TechCrunch viewed a photo of one such meeting Pei had with Qualcomm’s CEO.

Details about the upcoming device are thin, though the source notes that the product will share a similar design language and “elements of transparency” seen in Nothing’s first product. Released in 2021, the earbuds have shipped 400,000 units by the end of January, according to the London-based hardware startup.

In an interview with TechCrunch last July, Pei noted that the company had several devices on its roadmap before pulling out the earbuds. “We have many products in the pipeline. Earlier this year, we did a community crowdfunding round where we allocated $1.5 million to our community. That was bought very quickly. But as part of that funding round, we had a card game with some of the products in development. Our products are codenamed Pokémon, so there are a lot of Pokémon on that slide. We have several categories that we are looking at, but we haven’t really announced which ones they are.”

Pei certainly has the pedigree, as a co-founder and driving force behind OnePlus. The company’s first device entered an already mature — and seemingly saturated — category in 2014. Still, it managed to break through into the US market thanks to the flagship quality and mid-range prices. In 2021, OnePlus merged its hardware team with Oppo, the majority shareholder. Oppo, in turn, is owned by BBK, which is also behind major brands such as Vivo, Realme and iQOO.

The encounters come during a particularly staid edition of MWC. The industry has suffered from years of stagnant and declining sales, exacerbated by pandemic buying habits and subsequent supply chain delays and chip shortages. The smartphone market is well positioned for disruption but this will be a formidable task as handsets have grown from new to ubiquitous and good quality products can be bought cheaply. However, nothing has enough money to make a splash. The company has raised more than $70 million from dozens of leading investors, including GV, Tony Fadell, Casey Neistat, Kevin Lin and Steve Huffman.

It has also managed to build a following of its own by taking a similar community-driven focus, as well as a release schedule and marketing campaigns clearly informed by Pei’s interest in the sneaker market. But while the company was able to spark interest in a pair of $99 wireless earbuds, in the established smartphone world, that’s a very different matter.

Longtime leaders like LG and HTC have fallen away in recent years, while even big names like Google have found the industry to be a huge challenge. Players like Apple, Samsung and Xiaomi currently dominate global sales, followed by some of the aforementioned brands under the BBK umbrella. Last week, newcomer Onward Mobility announced it was scrapping plans to reboot the BlackBerry brand.

Essential, as is known, was unable to pull things together despite the massive $300 million funding, although one can point to numerous missteps and other issues with the company founded by Andy Rubin. Pei’s firm then bought the Essential branding, a move he later told TechCrunch came as the company considered adopting the ill-fated hardware maker’s name. A number of Essential employees, meanwhile, have gone on to launch their own new smartphone company, OSOM, which plans to release a device this year.

Nothing declined to comment on this report.

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