U.K.-based consumer tech company Nothing is setting its sights on the U.S., with ambitions of taking on Apple’s iPhone.
The startup, the hardware venture of Carl Pei — co-founder of Chinese mobile phone maker OnePlus — is in early conversations with American carriers about launching a new smartphone in the U.S., Pei told CNBC, without naming any of the carriers.
In July, Nothing launched Phone (1), a mid-range device with a design, price and specs similar to Apple’s entry-level iPhone SE.
The company, which is backed by iPod creator Tony Fadell and Alphabet’s VC arm GV, has only launched its smartphone in Europe, the Middle East and Asia so far — not the U.S. or Canada.
“The reason why we didn’t launch in the U.S. is because you need a lot of additional technical support, to support all the carriers and their unique customizations that they need to make on top of Android,” Pei explained in an interview with CNBC. “We felt that we weren’t ready before.”
“Now we are in discussions with some carriers in the U.S. to potentially launch a future product there,” said the Chinese-Swedish entrepreneur.
The likes of Apple and Samsung already have established relationships with large U.S. carriers, making it harder for smaller firms to compete.
But a third of the sales of its recently launched Ear (stick) headphones currently come from the U.S., Pei added.
“It’s definitely a market where there’s already a lot of interest for our products. And if we launch our smartphones there, I’m sure we could obtain significant growth,” he said.
The company expects its revenues to jump more than tenfold in 2022 — from about $20 million in 2021 to an estimated $250 million this year, according to figures shared with CNBC exclusively. It has also more than doubled its employees to more than 400. However, the firm is still losing money.
“The goal is to be profitable in 2024,” Pei said. “We are not profitable right now. And this year was made even harder due to the foreign currency exchange. We pay a lot of our COGS [cost of goods sold] in USD but we make money in pounds, in euros, in Indian rupees — so everything devalued against the USD.”
The U.S. dollar has rallied this year; the dollar index — which measures the greenback against a basket of major currencies — is up over 8.5% year-to-date.
Taking on Apple
Pei wants to challenge Apple’s iPhone in the U.S. But it’s a steep hill to climb.
“There’s a challenge with Android where iOS is just becoming more and more dominant. They have very strong lock-in with iMessage, with AirDrop, especially among Gen Z. So that’s a rising concern for me,” he said.
“There might be a time where Apple is like 80% of the overall market and that just does not leave enough space for Android-based manufacturers to keep playing,” he said.
Apple’s active installed base, which takes into account people who bought phones second-hand, surpassed 50% in the U.S. in the second quarter, surpassing Android, according to data from Counterpoint Research.
Apple was not immediately available for comment when contacted by CNBC.
He added that, in a couple of years’ time, Nothing may have to “have a serious think about this problem and how we tackle it.”
“It’s going to create a ceiling to our growth,” Pei said.
David vs. Goliath
Pei said his firm has faced a plethora of challenges in bringing its products to market. One of the major setbacks it faced was when it approached Foxconn, Apple’s largest iPhone supplier, to manufacture its phones.
According to Pei, Foxconn refused to do business with Nothing, citing past failures in the smartphone industry.
“Every startup manufacturer has worked with Foxconn,” Pei said. “But when it was our turn, they said no because every startup that worked with them failed. And every time a startup failed, Foxconn lost money on it, they were not able to recoup their costs.”
Foxconn was not immediately available for comment when contacted by CNBC.
Covid restrictions around the globe also presented a significant hurdle for the company. In India, where Nothing produces its phones, the company was unable to fly out engineers due to travel restrictions, with Pei saying the company had to manage its factory on the ground remotely.
“We really had to hustle to create this,” he said of Nothing’s smartphone.
In Shenzhen, China, where officials have imposed strict lockdowns, Nothing’s engineers had to discuss component designs and mechanics during mandated 45-minute periods when it was acceptable for people to go outside to buy groceries.
Nothing has sold over 1 million products to date globally, with its Ear (1) and Ear (stick) earbuds selling 600,000 units and the Phone (1) reaching 500,000 shipments.
Still, the startup is a tiny player, and it faces a bleak economic outlook where people are being forced to limit their spending drastically.
In Europe, smartphone shipments sank 16% in the third quarter year-over-year, per Counterpoint Research data — although they were up slightly from the previous quarter on the back of the iPhone 14’s strong launch.
Samsung is Europe’s largest smartphone maker with 35% market share, followed by China’s Xiaomi’s 23% and Apple’s 21%.
President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.
Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.
“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”
Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.
“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.
Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.
Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.
“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”
Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.
“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.
Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.
JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.
“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”
Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.
“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.
AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.
Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.
“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.
The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid.
“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.
AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.
Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.
U.S. President Donald Trump speaks during an event announcing new tariffs in the Rose Garden at the White House in Washington, April 2, 2025.
Chip Somodevilla | Getty Images
President Donald Trump announced an aggressive, far-reaching “reciprocal tariff” policy this week, leaving many economists and U.S. trade partners to question how the White House calculated its rates.
Trump’s plan established a 10% baseline tariff on almost every country, though many nations such as China, Vietnam and Taiwan are subject to much steeper rates. At a ceremony inthe Rose Garden on Wednesday, Trump held up a poster board that outlined the tariffs that it claims are “charged” to the U.S., as well as the “discounted” reciprocal tariffs that America would implement in response.
Those reciprocal tariffs are mostly about half of what the Trump administration said each country has charged the U.S. The poster suggests China charges a tariff of 67%, for instance, and that the U.S. will implement a 34% reciprocal tariff in response.
However, a report from the Cato Institute suggests the trade-weighted average tariff rates in most countries are much different than the figures touted by the Trump administration. The report is based on trade-weighted average duty rates from the World Trade Organization in 2023, the most recent year available.
The Cato Institute says the 2023 trade-weighted average tariff rate from China was 3%. Similarly, the administration says the EU charges the U.S. a tariff of 39%, while the 2023 trade-weighted average tariff rate was 2.7%, according to the report.
In India, the Trump administration claims that a 52% tariff is charged against the U.S., but Cato found that the 2023 trade-weighted average tariff rate was 12%.
Many users on social media this week were quick to notice that the U.S. appeared to have divided the trade deficit by imports from a given country to arrive at tariff rates for individual countries. It’s an unusual approach, as it suggests that the U.S. factored in the trade deficit in goods but ignored trade in services.
The Office of the U.S. Trade Representative briefly explained its approach in a release, and stated that computing the combined effects of tariff, regulatory, tax and other policies in various countries “can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero.”
“If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the USTR said in the release.