A quirky iPhone rival from the co-founder of OnePlus is his return to the smartphone industry.

After months of hints and teasers about the design of the handset, Pei's oddly titled startup finally unveiled its first smartphone on Tuesday. The business has just released its second product, which is called Phone 1.

Pei founded Nothing in 2020, with its headquarters in London. The company released its first product, a pair of wireless earphones called Ear 1, last summer and has since sold 560,000 copies.

Phone 1 appears to be similar to Apple's most recent iPhones. Along with conventional technology you'd expect in a mid-range smartphone, such Qualcomm's Snapdragon 778G+ CPU, the phone runs Android and has a dual camera with two 50-megapixel sensors and 5G mobile connectivity.

Edgy Style

The design of Phone 1 is what most people find intriguing.

The phone has a translucent back that reveals a distinct pattern of "glyphs," or shapes and lines. The company claims that a modernist rendition of the New York City subway map created by Italian designer Massimo Vignelli in the 1970s served as its inspiration.

The phone also has the peculiarity of really lighting up when you get a call or an app notification. When you receive a call, the device's 900 tiny LED lights flicker erratically and a variety of robotic-sounding ringtones start playing.

The "Flip to Glyph" option also mutes the phone when it is placed face down and displays only blinking lights in response to calls or notifications.

Pei described Nothing's product design as "retro-futuristic" in an interview with CNBC from last year, citing a variety of sources, including vintage Sony goods and high-end fashion designs.

The Chinese-Swedish tech entrepreneur claimed that Apple, which revolutionized the globe with the release of the first iPhone in 2007, had "slowed down a lot" on innovation and that modern hardware seems "cold."

The Phone 1's operating system is the most recent iteration of Android. Thanks to a collaboration with Elon Musk's electric car company, it features a feature that allows Tesla owners to open their car's doors among other interactions.

Pricing and accessibility

There isn't much that sets Phone 1 apart from the majority of ordinary mid-range smartphones, other from a few specialized design details and functionality.

The device's pricing is its most alluring feature. A basic Phone 1 device with 128GB of internal memory starts at £399 ($473), making it less expensive than the most recent flagship models from Apple and Samsung.

Pei is relying on a strategy he adopted at OnePlus — creating hype through some unconventional marketing and sales practices — rather than attempting to upend the smartphone industry by focusing on foldable displays or 5G.

Nothing will first introduce Phone 1 at a kiosk in London's West End from July 16 to July 20, after which sales will be made available to the general public online and at a few merchants and carriers starting on July 21.

More than 40 nations, including the U.K., Japan, and most of Europe, will be allowed to purchase it, but not the United States. Nothing indicates that the company is searching for a partner carrier to begin marketing the gadget to American customers.

Difficult Competition

Pei's next smartphone will face very tough competition. Apple and Samsung control 40% of the smartphone industry collectively. Additionally, smaller Chinese phone producers like Oppo and Xiaomi have made significant progress in Europe.

It will be "a significant task" to make the Nothing Phone 1 launch successful, according to Ben Wood, principal analyst at CCS Insight.

According to Wood via email, "the smartphone business is frightfully competitive and is dominated by Apple and Samsung, who have great resources."

It is much more difficult for a new entrant to break into the category because the rest of the addressable market is a gunfight between multiple Chinese firms trying to take share.

According to IDC estimates, there will be a 3.5 percent decline in smartphone shipments in 2022. Market challenges include a squeeze on standard of living and a persistent global component scarcity.

Nothing is a small, privately-held start-up that lacks the financial resources that Apple and Samsung can use to strengthen their supply networks and continue shipping goods internationally.

Even yet, the business is supported by several illustrious investors. The startup has so far raised $150 million from investors, including Tony Fadell, the man behind the iPod, and GV, the venture division of Alphabet, the parent company of Google.

According to the firm, more than 200,000 people have joined a waitlist to pre-order the phone. For the first 100 units, some bidders have even exceeded $3,000 on the e-commerce portal StockX.