Japan, Korea, China had their turn. India is now ‘inevitable’: Nothing's Carl Pei bets on the next global tech wave

Nothing CEO Carl Pei has made a strong bet on India emerging as the next major home for global consumer electronics brands, saying the country has already built the manufacturing base needed for the industry and now needs to develop deep in-house research and development capabilities.

In an open letter posted on X on Monday, Pei said India was “next” after Japan, South Korea and China in producing global consumer electronics champions, arguing that the missing piece was not manufacturing but the ability to design, engineer and continuously improve products within the country.

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“India is next,” Pei wrote, pointing to India’s position as the world's second-largest smartphone manufacturer, its large young population and deep software talent pool. “What it doesn't have yet is a global consumer electronics brand of its own. That will change. The only questions are when, and how.”

Pei, who is Swedish and has spent eight years in China, said the “how” would be R&D. “Real R&D: the ability to design, engineer and keep improving a product in-house,” he said, adding that this was what separated companies that lasted from those that merely capitalised on a market opportunity.

He said Nothing now wants to take the capabilities it has built globally to India and “scale it 100x”. As part of that strategy, the company is spinning out CMF from Nothing into a standalone Indian company that will be majority Indian-owned, headquartered in India and have its own team and R&D operations in the country.

“Nothing stays as a shareholder and partner. CMF becomes Indian,” Pei said.

Make in India to 'engineer' in India

Pei used India's smartphone market to illustrate what he sees as the gap between manufacturing and product engineering.

He recalled that Indian brands sold close to half of all smartphones in the country in 2015, with one domestic brand briefly becoming India's best-selling smartphone brand ahead of Samsung. But, he said, the advantage did not last.

“Within two years, foreign brands arrived with what the domestic ones lacked: real engineering,” Pei wrote, pointing to improvements in camera systems, design and product integration. By 2025, he said, Indian brands held less than 1% of a market they had once led.

“The better engineered phone wins,” Pei said.

He defined “real R&D” through five areas: engineering the phone's structure, materials, thermals and durability; selecting camera sensors and developing the imaging pipeline; developing and maintaining the operating system; retuning and certifying antennas when designs change; and working directly with suppliers to qualify and co-engineer displays, chipsets and camera modules.

“If the honest answer to most of those is ‘our manufacturing partner,’ the brand is picking a phone, not engineering one,” he said.

Pei argued that companies dependent on manufacturing partners for those capabilities ultimately face a ceiling because they compete largely on price. Brands that own their R&D, he said, can develop new products and reduce costs without compromising quality.

He also drew on his experience in China's electronics ecosystem, saying Chinese suppliers evolved from making lower-cost components into major global suppliers after domestic phone makers began demanding increasingly difficult engineering solutions.

“Every impossible request forced a supplier to build a capability it didn't have, and every new capability lifted everyone else,” he wrote.

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CMF to become India's engineering anchor

Pei said India had already completed what he called “step one” of the process: building a large-scale manufacturing base. Citing industry data, he said 99% of phones sold in India are now made domestically, compared with almost none a decade ago.

“But manufacturing is step one. Step two is R&D,” he wrote.

According to Pei, India has the manufacturing infrastructure, a domestic market absorbing more than 150 million smartphones annually and government backing to become a global export hub. What is missing, he argued, is a brand capable of generating demand for deeper engineering capabilities and helping build an ecosystem around them.

That is where he sees CMF fitting in.

Pei said Nothing already has several components required for such an anchor brand, including its own Nothing OS, in-house camera processing and features, industrial design capabilities, and direct relationships with suppliers for displays, chipsets and camera modules.

He said CMF was built on that foundation and was India's fastest-growing smartphone sub-brand in 2025.

The proposed spin-out would make CMF a standalone company incorporated and controlled in India, with a majority of its ownership held by Indian shareholders. Nothing would retain a stake and remain a partner, while the company would bring its engineering capabilities, operating system, supplier relationships and global brand infrastructure into the new entity.

“Being a partner means the company is Indian: owned in India, run from India, engineered in India,” Pei wrote.

He set an ambitious long-term target for the new company: 100 million phones a year.

“100 million a year is the line between a brand and a platform,” Pei said, arguing that reaching that scale would allow suppliers, software teams, camera engineering and AI capabilities to be built around the company's own specifications rather than simply adapting to an existing supply chain.

“India will produce global consumer electronics companies,” Pei wrote. “The only question is when, and that depends on who builds them.”

He ended by drawing a direct parallel with his own experience in China: “Last cycle, I moved to the country that was about to do this. This time I'd like to help build the cycle.”