Betting big on Nothing: Smartphone maker enters India with new JV

Zerodha cofounder Nikhil Kamath sees him as a smartphone “David” who can battle the “Goliaths” of India, which means big players like Apple Inc and Samsung. That’s no throw-away claim — his zanily named Nothing has been the fastest-growing smartphone brand in India for the last six quarters. Nothing sales have zoomed a staggering 146 per cent in Q2 CY2025 year-on-year, albeit on a low base.

 

Meet 36-year-old Chinese-Swedish entrepreneur Carl Pei, who cofounded One Plus in 2013 before moving on in 2020 to start Nothing, which is headquartered in London. 

The CEO, known for his innovative design and products, for whom India accounts for three-fourths of his smartphone sales, is raising the game in the country — one of the most competitive, complex but promising smartphone markets in the world. 

Just a few weeks ago, Nothing signed a $100 million joint venture with Delhi-based Optiemus, under which the Indian company will manufacture Nothing phones for the domestic as well as global market. It also announced that CMF, an affordable phone brand of Nothing, will now operate as an independent subsidiary in India — with R&D and manufacturing support in the country. 

Even more impressively, Nothing has just roped in Zerodha’s Kamath as an investor who has put in $21 million in a recent $200 million fundraise that valued the company at over $1.3 billion.

 

The company has the backing of Qualcomm Ventures and Alphabet (Google) as well. But can Pei, a late entrant in the cut-throat Indian market, leverage his cult status among Gen Z consumers to jostle his way into the top 10 league? 

He will have to make that coveted spot, armed with his out-of-the box product design, which includes a signature transparent body, if he is to survive and expand in India’s 150-mill- ion-phones-per-year market. 

The top three brands — Vivo, Samsung, and Oppo — account for half the smartphone volumes, and the top four, with Realme, over 60 per cent. In terms of value, the market is seeing a consolidation, with 61 per cent of the share controlled by just three brands — Apple, Samsung, and Vivo — in Q2 CY2025, up from 56 per cent a year ago. 

Questions mailed to Nothing in London did not elicit a response at the time of publishing.      

Nothing has a steep hill to climb. To put things in perspective, according to Counterpoint Research, between January and September in CY2025, Nothing (including its sub-brand CMF) had a market share of 1.4 per cent, which puts it at number 14 among smartphones. Leaving CMF out, the share comes down to only 1 per cent. 

Nothing’s global share, too, is miniscule at only 0.2 per cent — its main markets, apart from India, being Southeast Asia and the UK. To hit the top 10 in India, a company has to have a minimum 4 per cent volume share — or it will miss the bus. 

A call for change? 

Kamath thinks Nothing can be the disrupter. His research before betting on the company found Nothing’s big USP is product innovation. Kamath’s market survey showed that 67-83 per cent of specs in all flagship phones remain the same across versions. From that view, the $500 billion market starts to look pretty uniform, which points to the need for a niche product. 

Kamath points out that the two big incumbents, Apple and Samsung, bank on their brand value and add just a few new features in each new version. “So there is room for a new challenger (there has been none for over a decade) who could take on the Goliaths — and that is Pei.” 

Kamath’s team says volumes in the smartphone market are dominated by the mid-premium and premium market, which grew by 37 per cent in Q2CY25 year-on-year, while overall volumes grew at 8 per cent — an obvious sweet spot. Also, it is easier now to trade up to a more premium phone because of the many attractive EMI schemes on offer. This is a trend not only in India but also in Southeast Asia, West Asia, and North Africa — presenting a large global opportunity.

 

The target, says Kamath in his report, would be the young, who make up 50 per cent of the population. They are looking for a product that can be recognisable “from 10 feet away”. To create that visual identity, design is key. 

The strategy 

Pei’s India mobile strategy is currently focused on two segments. Tarun Pathak, research director at Counterpoint Research, says one segment is in the ₹20,000 to ₹30,000 price point, which accounts for 85 per cent of sales and in which Nothing already has a 4.5 per cent share — grabbed from competitors like Vivo and Samsung.   

In the ₹15,000 to ₹20,000 mid-range segment, the company has been able to garner a 3 per cent share, pushing volumes with the more affordable CMF brand. 

Pathak says, “For Nothing to get into the top 10 in India, it will need to keep its momentum in the mid-tier and entry premium segments with its models performing well gen-on-gen for at least one-to-two years to gain that scale — especially the premium segment, which is a high-growth market, growing at 13 to 14 per cent”. 

He says Nothing, including CMF, has been clocking 0.5 million to 0.6 million unit sales a quarter in India. But with CMF now a separate brand, the mobile maker needs to entice users from its rivals so that it can increase its current 1 per cent market share by 3 percentage points and break into the top 10.

 

Pei has already taken his first big gamble in the ultra-premium segment with the launch of the Nothing Phone 3 in July this year at ₹79,999. It comes with a new “Glyph Matrix” system, where a display in the back offers app-specific alerts, contact-based notifications and micro games. 

But it had to drop its online price sharply to ₹39,999 in the festive season. According to Counterpoint, its share in the ₹30,000 and above market is a mere 0.05 per cent currently. 

Entering the premium market is not easy — the big boys like Apple Inc and Samsung rule here, with a 46 per cent share in value. 

With an aggressive strategy, Apple — through its discounted prices on older versions of the iPhone, backed by attractive financing schemes — has been able to nudge users in the mid-priced phones segment to move up the premium phone ladder. 

Nothing has followed a dual strategy for distribution — unlike many of its competitors who are heavily dependent on online sales. With the launch of the Nothing Phone 3a, the company announced plans to be present in over 10,000 brick-and-mortar stores. The logic is simple: For relatively new brands, offline builds customer confidence, something online cannot. The strategy seems to be working as currently the ratio between online and offline sales is balanced at around 55:45. 

It is also taking another important step, like most of its competitors: To build a manufacturing base that will churn out “make in India” phones, leveraging the government’s production-linked incentive scheme. The company is already assembling its phones domestically. Dixon assembles 60,000 to 70,000 phones every month for Nothing. Investors will hope these uniquely designed Nothing phones can make something of a dent in the market.