In a market where the barriers to entry are as formidable as the competition is stiff, OSOM Products has announced that it will be shutting down its operations this Friday. The company, which emerged from the remnants of Essential in 2020, faced an uphill battle in its quest to launch a privacy-focused mobile phone, ultimately succumbing to the harsh realities of the consumer electronics landscape.
The news was first reported by Android Authority, which obtained an internal announcement from OSOM CEO Jason Keats. The report in Android Authority is correct, OSOM is sadly shutting down, Keats confirmed in a statement provided to TechCrunch. In May of 2024, having no customers for a mobile phone despite concerted efforts, OSOM at the time decided to pivot to a new project.
OSOM’s journey has been fraught with challenges, much like its predecessor, Essential. The company’s plans to launch a privacy-centric handset were ambitious, but the road was fraught with legal and financial hurdles. A lawsuit filed by a former employee alleging financial mismanagement added to the company’s woes.
Despite these setbacks, OSOM managed to bring a product to market under its own name. The OSOM Privacy Cable, a USB cord designed to prevent data transfer in the presence of juice jackers, was a novel solution to a growing concern among smartphone users. However, the company’s core product, a first-party smartphone, never saw the light of day.
Instead, OSOM lent its technology to a web3-focused device from Solana, an indication of the company’s willingness to adapt and explore new avenues. But the harsh reality of the market proved too much to overcome. OSOM was forced to let go of a number of employees at that time to reduce our burn rate, Keats explained.
The company’s new project referred to an AI-powered camera, which was intended to be a follow-up to its unreleased smartphone. According to initial reports, Keats had attempted to sell the company to HP but was unable to strike a deal. Unfortunately, given the bleak market climate for fundraising for consumer electronics startups, we were unable to raise a new round, Keats said.
The closure of OSOM highlights the challenges faced by startups in the consumer electronics industry. The market is dominated by established players with deep pockets and established supply chains, making it difficult for new entrants to gain a foothold. OSOM’s failure to attract customers for its mobile phone, despite its focus on privacy, underscores the difficulty of differentiating in a crowded market.
The shutdown of OSOM’s operations will take place on September 6, with some maintenance operations continuing to ensure contractual requirements are met. The company’s closure is a stark reminder of the risks inherent in launching a new product in the highly competitive smartphone industry.
In other tech news, Yahoo has announced that its suite of services will no longer be accessible from mainland China as of November 1st, 2021. The company’s products and services will remain unaffected in all other global locations, with Yahoo expressing gratitude for its users’ support and readership.
As OSOM closes its doors, the tech industry reflects on the challenges faced by startups in the consumer electronics space. While innovation and new ideas are crucial for progress, the harsh realities of the market can quickly dampen the most ambitious of endeavors.
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