In the era when emotional value reigns supreme, a hardware startup's journey towards a billion - dollar valuation | Exclusive interview with a co - founder of Nothing

Author: Ou Xue

Editor: Yuan Silai

In 2025, when we talk about the mobile phone industry, what are we talking about?

Large companies in the mobile phone industry, with revenues in the tens of billions of dollars or RMB, remain unshakable giants in the hardware industry. However, the end of the wild era of high - speed growth has left the industry fatigued, and the enthusiasm has long since faded.

So, when the hardware technology brand Nothing was founded in the UK, many people were curious about its future. Even after witnessing numerous failed attempts, people still long to see the victory of idealism.

Fortunately, Nothing has survived. It has been in existence for 5 years, and its revenue exceeded $500 million in 2024, which is quite astonishing. "You know, there aren't many hardware companies in Europe. A company like Nothing, which was founded in London from day one and focuses on high - end consumer hardware, is very rare these days," an investor told us.

Moreover, we learned from Nothing that by 2025, its cumulative revenue had exceeded the $1 billion mark.

If we look back, Nothing is still a young startup.

In 2021, Nothing launched its first true wireless earbuds, the Ear (1), featuring a special transparent design. It carved out a niche in the highly competitive market dominated by white - label products and TWS earbuds from mobile phone manufacturers.

Subsequently, Nothing successively launched several TWS earbuds, such as the Ear (stick), Ear (2), and an open - style earbud, the Ear (open).

In the smartphone field, Nothing launched its first smartphone, the Phone (1), in 2022. This phone injected a sense of freshness into an industry that mainly emphasized performance parameters at that time, thanks to its iconic semi - transparent back cover design and the Glyph interactive light strip system.

Later, several smartphones, including the Nothing Phone (2), Phone (2a), and CMF Phone (1), were introduced one after another. According to multiple media reports, as of now, Nothing's cumulative sales have exceeded 7 million units.

In July this year, Nothing launched its third flagship smartphone, the Nothing Phone (3), with a price tag over $200 higher than the Phone (2), reaching $800 - on par with the initial launch price of the iPhone 16 ($799).

While the iPhone is reducing prices, Nothing, a small company, has chosen to raise prices, seemingly going against the current.

However, this is not a blind adventure. In hardware startups, the general - purpose mobile phone and home appliance sectors have already been dominated by a few winners. In the diverse global market, startups focusing on niche customer segments can successfully capture customers that large companies have difficulty reaching, especially the younger generation.

Nothing has proven this. The exclusive data we obtained shows that the average age of Nothing's global users is only 26, 10 years younger than the average age of users of similar products. More than 60% of users consider design as the primary factor when making a purchase.

This time, the Phone (3) also put a lot of effort into its design. It is equipped with a pixel - style second screen called the Glyph Matrix. This screen integrates various AI - enabled interactive experiences in a modular form, including filtered essential notifications, a flashlight, and battery level display. Additionally, users can create their own custom modules.

The small black circular screen in the top - right corner is the pixel - style second screen, Glyph Matrix, of the Nothing Phone (3) (Source: Company)

"We believe that the younger generation around the world shares a common trait: they all want to better express their own values," Steven, the co - founder of Nothing, told us.

Meanwhile, Nothing has also ventured into the over - ear headphone market for the first time, launching the Headphone (1).

This headphone continues Nothing's signature transparent design and collaborates with the British audio brand KEF on the acoustic unit and the listening experience in different scenarios.

Product image of the Nothing Headphone (1) (Source: Company)

Even three years ago, individuality was not a major factor in purchase decisions. However, products like Pop Mart, Tagi., and Casetify have created growth myths, proving that the consumption habits and behaviors of Generation Z are undergoing a drastic change. Large companies are slow and clumsy in adapting to the new consumption wave. In contrast, those maverick startups have successfully attracted the young users that the giants envy the most.

As a result, Nothing has become one of the few companies in the hardware industry to receive substantial capital investment. According to Bloomberg, Nothing is currently conducting a Series C financing round, aiming to raise at least $100 million. Previously, according to Yingke, Nothing's cumulative financing amount had reached $250 million.

Of course, for a startup brand like Nothing, the battle for survival is far from over. In terms of the supply chain, brand, and distribution channels, Nothing still seems young and vulnerable. In the jungle of the mobile phone industry, survival is a cruel struggle every day, month, and year, leaving little room for error for Nothing.

As the Phone (3) and Headphone (1) were officially launched, we had an in - depth conversation with Steven about the company's new products, market development, and the global demand for smartphones.

The following is the edited conversation:

01 New Product Launch

Yingke: Why did the price of the Phone (3) increase so significantly?

Steven: The Phone (3) represents our latest achievement in the design of the user interaction experience for smartphones. Compared with the previous two generations, we have made innovations, especially in industrial design and user - interaction elements.

We have also optimized key aspects of the basic smartphone experience, such as imaging, smoothness, and artificial intelligence, and strived to achieve the best balance between performance and power consumption.

Of course, there are also some objective factors. For example, compared with the previous two generations, we have upgraded the selection of key components. Our main consideration is how to create more interesting products, rather than simply setting the price based on the prices of flagship products from other manufacturers.

Product image of the Nothing Phone (3) (Source: Company)

Yingke: What's the scale of Nothing in the supply chain?

Steven: Our scale is relatively small. Although Nothing is a small - scale player, our supplier partners have given us great support. In fact, it is the actual shipment volume and growth rate that have given suppliers confidence. As the youngest and still - surviving consumer technology company in the mobile phone field, with increasing shipment volume, an expanding product portfolio, and a growing consumer base in the market, suppliers can see the potential and value of cooperation with us.

Yingke: How do you view the highly competitive mobile phone industry?

Steven: We have a different view. We believe that the mobile phone industry is a blue - ocean market. The mobile phone is a highly integrated industrial terminal, connected to an extremely large and complex industrial chain. Any breakthrough in software or hardware technology can be implemented and scaled up through mobile phones, making the mobile phone industry the main beneficiary of the value increase in the industrial chain.

At present, neither the software capabilities nor the hardware forms have reached the limits of this industry. As the most important personal portable information - processing terminal, the mobile phone will maintain its core position in the foreseeable future, and no other hardware can replace it. Therefore, the mobile phone industry is still a continuously evolving market full of opportunities.

Yingke: How can startups survive?

Steven: Mobile phones are essentially consumer products. The essence of making consumer products is to provide consumer value. For hardware manufacturers to succeed, they ultimately rely on differentiated and innovative products that consumers have never seen before.

The consumer electronics market is a mature one, and companies cannot afford to have any weaknesses. However, to make further progress, it is not just about technological barriers; the current challenge is also to cross the psychological threshold of consumers.

Yingke: We noticed that the Phone (3) is equipped with AI features. What's Nothing's view on the combination of AI and mobile phones?

Steven: In the long run, the mobile phone is the most important carrier for AI. Our primary concern is how to create value - added applications of AI that consumers can perceive, recognize, and actively spread. For example, the Phone (3)'s Essential Space has a small feature: flip - to - record + AI summary, which is a first in mobile OS applications.

Yingke: In the era of AI + hardware, what inspiration can the mobile phone industry offer to other hardware industries?

Steven: In the foreseeable future, the mobile phone is the most important carrier for AI. Therefore, other consumer hardware categories will ultimately revolve around the mobile phone terminal in different forms.

Yingke: Why did Nothing decide to launch over - ear headphones this year?

Steven: Audio products are not just ancillary to mobile phone manufacturers; they have their own independent market demand and development space. Especially over - ear headphones offer a different user experience compared to TWS earbuds in specific scenarios and can also serve as a means for individuals to express their values. That's why over - ear headphones were the most anticipated new product category among our global community.

During the product - definition stage, we benchmarked the technical parameters against those of several flagship over - ear headphones. In terms of the sound quality experience, we collaborated with the top - tier brand KEF. However, when it comes to defining our target consumers, we have our own considerations.

Display of the Nothing Headphone (1) (Source: Company)

02 Market Development

Yingke: How are Nothing's products performing in different markets?

Steven: In the smartphone market, emerging markets such as India remain our largest markets and have maintained high growth rates. Meanwhile, in Western Europe and Japan, we have become one of the fastest - growing mobile phone brands in the local markets in the first half of this year. In the smart product segment (audio devices and smartwatches), the markets in Western Europe, North America, Japan, and South Korea have been performing strongly.

Yingke: Your main market is in India. However, it is generally believed that Indian consumers have limited purchasing power and tend to focus more on product specifications rather than design. What's your take on this?

Steven: When considering the global consumer demand, we don't just think from a demographic perspective. We believe that consumer demand is diverse everywhere, with both rational and emotional aspects.

We don't simply assume that all tech enthusiasts only care about specifications. In fact, there is always a group of consumers who seek unique experiences and emotional value. They don't follow the crowd but make choices based on their own judgment.

Especially for the younger generation, we believe that the younger people around the world share a common trait: they all want to better express their own values.

Yingke: So, how is Nothing performing in the Indian market currently?

Steven: This year, we've noticed that our products are gradually gaining more visibility among consumers. For example, in the first quarter of 2025, we captured a 1.64% market share in India.

Yingke: In Japan, the iPhone has a very high penetration rate, and local brands like Sony are extremely strong. How did you break into the Japanese market?

Steven: As it turns out, our headphone shipments in Japan have consistently ranked among the top ten globally, and this year, our mobile phone product, the Phone (3a), has achieved explosive growth.

We haven't done much promotion in Japan deliberately. We've observed that there is a group of Japanese users with an international perspective, sensitivity, and good taste. The brand, product visuals, and design experiences we offer appeal to some Japanese consumers.

Yingke: Japanese consumers are quite price - sensitive, which is why brands like MUJI and Uniqlo are so popular. Will Japanese users pay for relatively subjective factors?

Steven: In fact, we've found that a significant proportion of Japanese consumers are more sensitive to the quality - to - price ratio rather than just the price - to - performance ratio. They don't just analyze products based on cold, rational numbers. Instead, they consider the overall brand perception created by the software, hardware, industrial design, and even the packaging, and they may be touched by it. This is not only true in the Japanese market but also in other global markets we've observed.

Some Japanese users can empathize with our products when they see that they are different and interesting. They can sense the great effort we've put into the design, which creates a spiritual resonance with them.

Yingke: How did you enter the Japanese market?

Steven: Nothing has partnered with the Rakuten carrier. Our products are also available in cultural retail stores such as Tsutaya Bookstore and fashion boutiques. Our new product, the Phone (3a), has been officially on sale at Rakuten Mobile in Japan since the second quarter of 2025.

Yingke: What about the US market? Do you have any plans for this year?

Steven: Both the Nothing Phone (3) and Headphone (1) will be officially launched in the US market this year. As the market with the highest concentration of tech enthusiasts and tech media overseas, consumers and the media in the US have shown strong curiosity and interest in the Nothing brand, with positive feedback. In the US, we've always maintained product availability through our official website and other channels, and the sales of our audio and wearable products have been strong. For example, the sales of our audio products have increased by at least six - fold from last year to this year.

Yingke: What are the characteristics of US consumers?

Steven: The minds of the younger generation in the US are largely occupied by Apple. Most of them use Apple computers, which poses both challenges and opportunities for us. We think that American young people may not be aware that there are other tech brands to choose from besides Apple. Therefore, our first step is to create a cool and interesting brand to attract their attention and follow - up, rather than focusing on immediate conversion.

03 Chinese Market

Yingke: I heard that the Headphone (1) will be launched in the Chinese market this year. How is your team building in China progressing?

Steven: Yes, the Nothing Headphone (1) will be launched in China this year. As for our Chinese team, we're still in the early stages of building it, and the sales team has fewer than 10