4 ms·

I don't understand how selling 88,000 phones isn't considered a success. That's $44M in revenue, assuming the phones sold for $499 each. For a startup, even one

by mjfern 8y ago

I don't understand how selling 88,000 phones isn't considered a success. That's $44M in revenue, assuming the phones sold for $499 each. For a startup, even one founded by a Google veteran, like Rubin, this seems like a home run for a first product offering.

ksec 8y ago
>assuming the phones sold for $499 each Except it isn't. Many were sold at heavy discount.
yitchelle 8y ago
The phone selling business is not as clear cut as selling oranges at the market. There are deals with carriers and other infrastructure stake holders that cloud the view significantly. What that means to Essential's bottom line is not clear. It would be difficult to even consider the assumption of the revenue of $44M for them.
- baybal2 8y ago
  >The phone selling business is not as clear cut as selling oranges at the market. There are deals with carriers and other infrastructure stake holders that cloud the view significantly. My personal experience is a polar opposite of this. I myself worked with few companies doing private label handsets. It is a near foolproof business. You go to an ODM, put money first for a respin of a successful product under your brand, then you dump the batch on TaoBao, Aliexpress, and trade companies. This will stably gain you profits in single digits, and at about %15 if you have some luck along with real insight into doing things like that. Should Andy be more easy on pricing, and also "simply dump the product off an online marketplace," he would've been in black by now.
unfunco 8y ago
The comment above says they spent $100M to make that $44M revenue.
- icc97 8y ago
  Going up against major players typically starts with a massive cost, consider the losses that Tesla is taking on. As per my other comment [0] from the article it's more like $89M in revenue. [0]: https://news.ycombinator.com/item?id=17152056 https://news.ycombinator.com/item?id=17152056
icc97 8y ago
More proving your point, but from the article: > The phone’s initial price was $699, the same as an iPhone viewed as a competitor. At that price, the company sold as few as 20,000 units across its website and third-party distribution partners, one of the people said. Last October, Essential lowered the price by $200, which boosted sales. The company has sold at least 150,000 to date, according to the person familiar with the company. So that's 20,000 * $699 + 150,000 * $499 ~ $89M
- wpietri 8y ago
  That's total sales, but probably not total revenue, in that third-party distribution partners (that is, stores) will take a slice. Possibly a big one given Essential's relatively poor bargaining power.
snaky 8y ago
More than 100,000,000 units is a one quarter at Chinese market. How 88,000 is even something to talk about.

by mjfern 8y ago

ksec 8y ago

>assuming the phones sold for $499 each Except it isn't. Many were sold at heavy discount.

yitchelle 8y ago

The phone selling business is not as clear cut as selling oranges at the market. There are deals with carriers and other infrastructure stake holders that cloud the view significantly. What that means to Essential's bottom line is not clear. It would be difficult to even consider the assumption of the revenue of $44M for them.

baybal2 8y ago
>The phone selling business is not as clear cut as selling oranges at the market. There are deals with carriers and other infrastructure stake holders that cloud the view significantly. My personal experience is a polar opposite of this. I myself worked with few companies doing private label handsets. It is a near foolproof business. You go to an ODM, put money first for a respin of a successful product under your brand, then you dump the batch on TaoBao, Aliexpress, and trade companies. This will stably gain you profits in single digits, and at about %15 if you have some luck along with real insight into doing things like that. Should Andy be more easy on pricing, and also "simply dump the product off an online marketplace," he would've been in black by now.

unfunco 8y ago

The comment above says they spent $100M to make that $44M revenue.

icc97 8y ago
Going up against major players typically starts with a massive cost, consider the losses that Tesla is taking on. As per my other comment [0] from the article it's more like $89M in revenue. [0]: https://news.ycombinator.com/item?id=17152056 https://news.ycombinator.com/item?id=17152056

icc97 8y ago

More proving your point, but from the article: > The phone’s initial price was $699, the same as an iPhone viewed as a competitor. At that price, the company sold as few as 20,000 units across its website and third-party distribution partners, one of the people said. Last October, Essential lowered the price by $200, which boosted sales. The company has sold at least 150,000 to date, according to the person familiar with the company. So that's 20,000 * $699 + 150,000 * $499 ~ $89M

wpietri 8y ago
That's total sales, but probably not total revenue, in that third-party distribution partners (that is, stores) will take a slice. Possibly a big one given Essential's relatively poor bargaining power.

snaky 8y ago

More than 100,000,000 units is a one quarter at Chinese market. How 88,000 is even something to talk about.