There's room for more than one 'love brand' in phones, says the COO of Andy Rubin's new company

Key Points
  • Niccolo De Masi, president and chief operating officer of Android founder Andy Rubin's new company Essential, thinks most phones today are "boring"
  • Essential believes there's room for more than one "love brand" in mobile.
  • The first big place where the phone will compete is in 360-degree video.
Andy Rubin of Essential
Corbis Historical | James Leynse | Getty

Android creator Andy Rubin unveiled a new phone from his new company on Tuesday — a phone that is the underdog in a world of giants.

The scrappy 100-person company, Essential, revealed a titanium and ceramic phone ahead of the Code Conference in Rancho Palos Verdes, California, where Rubin is slated to speak on Tuesday night. In addition to its expansive screen and damage-resistant exterior, the phone also sports a magnetic port for attachments.

Essential has no small task before it: It's taking on two of the world's richest public companies, Apple and Alphabet. It's also competing with companies like Samsung, Amazon and Facebook in its home and VR platforms.

But as content like "Mr. Robot" or "The Circle" demonizes big tech, Essential hopes to paint itself as a defender of American consumers.

The first attachment is one of the smallest 360-degree cameras on the market. The exterior also allows a thinner phone with a larger screen than iPhones or Pixels — at a time when consumers are choosing between phones that all look the same, said Niccolo De Masi, president and chief operating officer of Essential, told CNBC on Tuesday.

"It used to mean something — your selection, your choice," said De Masi, formerly of Glu Mobile. He said that consumers perceive their smartphone choices today as "boring," with innovation that's incremental and lacks "passion."

To be sure, the "distinctive" appearance of the Essential phone would not be hard to recreate — patents show that Apple is already looking into ceramic finishes. Copycatting runs rampant in Silicon Valley, often to great success. Most recently, Facebook's Instagram recreated many well-loved Snapchat features. Apple once waged war on Samsung over intellectual property surrounding the iPhone. Apple itself has been accused of copying Xerox.

De Masi said he expects Essential to be copied.

"There is a fair amount of intellectual property protecting our devices," De Masi. "But at the same time, consumers don't care about that as much as who was first. I don't think people get much credence in the Western world for being copycats. We know people will copy us. These devices will show up in plastic and cheaper materials in all sorts of markets around the world. Our goal is not to be near-looking."

The camera is part of Essential's larger vision to allow consumers to switch out parts of their phone as technology improves without swapping the whole phone. Essential's $700 price tag aims to present more "pro-consumer" profit margins than competitors like Apple and Samsung, De Masi said.

"We're not pricing ourselves at two or three times the cost of materials," De Masi said. "Like, consumers complain about how many dongles they have to buy. We're doing away with those."

De Masi doesn't think that Asian brands like Xiaomi will expand as "love brands" in the U.S., despite their cheaper prices. Even if Essential used foreign suppliers, prototyping in Silicon Valley keeps Essential at the bleeding edge of innovation, De Masi said.

"There is room in the market, in the Western world, for another, what I call, 'love brand,'" De Masi said. "I think Apple has done a good job on that over the past 30 years. I think everyone else has either retrenched or are seen as foreign brands."

Other brands, like Motorola and even Google, have tried to release modular phones with interchangeable parts, to little success. But De Masi said that the manufacturing process has become easy enough that creating nimble, beautiful phones is now easier and cheaper.

But despite his criticism of other cookie-cutter phones, De Masi said that Essential's modular phones will not enable options like changing the color of chassis because they are not "meaningful innovation."

One of the first arenas where Essential will compete is VR, specifically 360 videos. It's an area that Google's Daydream and even Facebook are trying to win.

New Essential smartphones in black and white, with 360-degree video attachment.

"We believe it's going to democratize 360-video," De Masi said. "In this case, the hardware's going to allow the format to be unleashed. Before this, you had to buy a device as big as my fist for $300 or more. .... It changes the perspective of all events, even news. In 360, all of the sudden you get truth in what's going on at all times. Most people argue about perspective and argue about the timeline. I think it would change truth in news and truth in things like demonstrations."

De Masi said there's no launch date yet, but that Rubin is "very aggressive" about bringing the products to market quickly. The next attachment could be some kind of recorder, he said.

"Only about half of what we're working on has even been hinting at," De Masi said. "So we look forward to keeping the roadmap aggressive."