Carl Pei on How Nothing and CMF Are Betting Big on India’s Youth, Beyond AI Hype, and Bold Smartphone Market Strategy

Nothing, the London-based company, is steadily expanding its ecosystem, and CMF Phone 2 Pro, Buds 2, Buds 2 Plus, and Buds 2a are the latest entrants. In roughly one year, the sub-brand is going all out to bring devices that it thinks will make a difference to consumers in India. The best part is that the brand is thinking along the lines of what Indian consumers want, and after taking market feedback, it has added a charging adapter and case to the CMF Phone 2 Pro retail unit.

At the sidelines of the event, Gadgets 360 got a chance to sit with Nothing CEO Carl Pei to talk about new phones, the Indian smartphone market, innovation challenges, and future plans.

Nothing/ CMF: The young user base is a boon

Talking about the new sub-brand CMF, Pei stressed that the average age of users is under 25, which is a big plus for a young brand. “We are the youngest smartphone brand in the world based on our user base. I think here in India, the average age for our users is 24. I think that’s really important because if a company is always able to get young customers in, that means the market share will grow over time. If the user base keeps getting older and older, that means the market share will decrease over time. So going forward, we’re going to be a lot more focused on this segment of the market,” he said.

Apart from India, Pei said that Europe is the second biggest market for Nothing in the smartphone category, while the audio category is very different. “For audio, it’s mainly developed countries like the US, UK, Germany, and Japan because we don’t have the iPhone problem.”

At the launch, Tarun Pathak, Research Director and Telecom Analyst at Counterpoint Research, revealed an interesting data point: Nothing saw a massive leap of over 156 percent YoY growth, making it the fastest smartphone brand in India and has been seeing a massive jump for five successive quarters. Interestingly, Nothing is the only brand over the past decade to achieve this milestone, as per Counterpoint data.

Talking about the consumer shift, Pei shared a fascinating insight: about 12 percent of iPhone users have shifted to Nothing phones.

“12 percent might sound low, but actually, it’s very high because the Apple market share here is more than what we have. That means we’re gaining versus losing users towards Apple. I think that’s something we’re really happy to see because I think we have a similar ethos between the two brands, not just tech focus, but more focus on the overall experience, the software, the design, and the overall brand. So that’s encouraging. And the second really encouraging thing about the user base is that they’re very young.”

Akis Evangelidis, Co-founder and India President, Nothing, during the launch of CMF Phone 2 Pro

Telephoto lens addition: A smart move!

When asked about adding the telephoto camera to the all-new CMF Phone 2 Pro, Pei said it was more of a personal thing. The all-new CMF phone has a 50-megapixel telephoto camera, making it the only one in the sub-Rs. 20,000 segment to offer such a feature.

Pei said, “It’s more of a personal thing because I’ve seen more and more people like to shoot in 2x right. Because when you shoot in 2x, the edges look a lot better. If you shoot on 1x some, sometimes the edges are that tighter. And I see more and more myself, but also my friends using 2x so, and it was pretty underserved in this segment, so I want to try it. I think it’s going to work well. The Periscope camera on the Nothing 3a series worked much better than we expected, actually. So I’m confident that the new camera system on the new CMF is going to be loved by consumers.”

Talking about AI, the buzzword, Pei said that he wants to ban the use of AI term in the company and added that “AI is just a tool, just the ingredients to try and solve a user’s need.” He added that lately AI has been pushed by smartphone brands as a more marketing term than anything else.

Nothing/ CMF: Bold strategy for the smartphone market

Pei also noted that the Nothing products, including the CMF product line, are being manufactured in India following the “Make in India” initiative. He also said that the company started exporting products from India, and the Middle East is one of the regions that’s getting “Made in India” products.

Pei, on the approach to the smartphone market and innovation challenge, said that Nothing has taken a practical approach so far. “We’ve been super practical about the way we run this business. Because as you can imagine, engineering costs a lot of money to develop each new product. Then every product we launch has to be a hit, right? Because to offset all the costs that we invest in so, therefore, we are quite conservative in the innovation that we bring to the market over time; as the volumes grow, as the margins grow, that’s when we can dare to be more innovative in our product approach. On the smartphone side, we’re going to see that happening on the software to begin with, Pei added.

Akis announcing global prices for the CMF Phone 2 Pro

Essential Space: Free run ends soon?

Finally, we checked about Essential Space, the all-new AI-powered feature introduced in the Nothing 3a series. The feature lets users take notes, voice notes, and set reminders, packed in one place and managed by a dedicated button on the device.

Lately, some users claimed that they noticed messages about reaching the monthly processing limit and speculated that Essential Space would eventually become a paid feature in the future. Pei acknowledged the reported issue and said Essential Space will have different tiers.

“The current functionality will remain free. But our approach is like, first we got to deliver value, then we have to charge for not the other way around, not to charge for something that is not very useful. So I know some of our users reported this, but we haven’t been the best at communicating this.”

CMF by Nothing’s latest products will go on sale in a phased manner, starting with the CMF Phone 2 Pro, which goes on sale next week, while the CMF Buds 2, Buds 2 Plus, and Buds 2a will be available in India by the end of Q2 2025.