In the wee hours of today the Wall Street Journal reported that SoftBank CEO Masayoshi Son is dropping plans to invest a titanic sum of 100 million dollars in a startup that’s planning a rival smartphone to Apple’s iPhone7.
The actual reason for the sudden change of heart is still speculative. However reports emanating from the West all point out that it wasn’t clear whether Masayoshi was planning to use money from the 100 billion dollar Vision Fund. If that’s the case then it’s only natural that Apple may have raised concerns given the tech giant is also an investor in the fund. The deal was supposed to have been at an advanced stage when Son got cold feet about making the investment.
It has also been said that Apple had not actively sought to kill a “nearly complete” deal.
The Vision Fund is a 100 billion dollar fund aimed at funding startups dealing in emerging, disruptive technology. It has the contribution of the Saudi Arabian government’ sovereign wealth fund, SoftBank’s own contribution of 25 billion dollars and others like Foxconn, Oracle founder and Apple who has committed to invest a billion dollars in it.
This startup that SoftBank has recently washed their hands of is the brain child of Andy Rubin, the creator of the Android OS – the chief competition to Apple’s iOS.
The startup named Essential Products would have had a valuation of a billion dollars had the investment gone through.
Registered in California in 2015, by Rubin and a team of former Googlers, Esssential Products has trademark listings for smartphones, tablets, operating software for mobile phones. The same kind of product Apple makes.
In fact Rubin was making a direct competitor to the iPhone 7. According to the AppleInsider,
“Rubin's company was reportedly in the prototype process of a high-end smartphone to compete with the iPhone 7 pricing. A magnetic connector of some sort was associated with the effort, allowing for easy expansion of the phone, a concept that Google itself stopped developing when it cancelled Project Ara.”