Nothing's Carl Pei terms India 'inevitable'

Nothing CEO Carl Pei believes India will become a major hub for global consumer electronics brands in the future. In an open letter, Pei argued that while India has the manufacturing capabilities, it lacks the ability to design, engineer and continuously improve products within the country. India is currently the world's second-largest smartphone manufacturer and has a large young population and deep software talent pool, but it is missing a homegrown consumer electronics brand.

Pei sees the solution as developing deep in-house R&D capabilities to design, engineer and improve products in India. He compared India's smartphone market before and after foreign brands entered, noting that while Indian brands initially sold a large portion of local smartphones, foreign brands eventually overtook them by offering better engineered products.

Pei defined "real R&D" as the ability to design, engineer and improve products within the country, citing five key areas: phone structure, materials, thermals and durability, camera systems and imaging pipeline, operating system, and antennas and displays. He argued that companies dependent on manufacturing partners for these capabilities face a ceiling and can only compete on price.

Pei believes that brands with their own R&D can develop new products and reduce costs without compromising quality. He also drew parallels with China's electronics ecosystem, where domestic phone makers demanded increasingly difficult engineering solutions, forcing suppliers to build capabilities that lifted everyone else. Pei sees Nothing's CMF sub-brand as the anchor for India's consumer electronics industry, citing its own Nothing OS, in-house camera processing, industrial design capabilities, and direct relationships with suppliers.

The proposed spin-out would make CMF a standalone Indian company with a majority Indian ownership, incorporating Nothing's engineering capabilities, operating system, supplier relationships, and global brand infrastructure.