CMF to Become a Standalone Indian Company as Carl Pei Pushes for Local R&D
Nothing CEO Carl Pei has announced that CMF will spin out as a standalone Indian company with majority Indian ownership, its own team and R&D operations. The move aims to strengthen CMF’s engineering capabilities in India and help build a larger domestic consumer electronics ecosystem.
Carl Pei, the CEO of Nothing, has recently made an announcement about making a significant decision regarding CMF; specifically, the budget-oriented consumer electronics brand is now confirmed to be split from Nothing and formed into an independent entity in India. This will mean that the company will belong to Indian investors and have its own team and R&D department, though it will remain associated with Nothing in the form of a partner business.
CMF, which debuted in 2023 as a more affordable sub-brand, was created by Nothing, developing products in the smartphone and consumer electronics market. As said by Pei, making CMF into an independent company in India will enable it to manufacture its products and develop engineering independently rather than operate under the umbrella of Nothing as a sub-brand only. The idea of doing so has been presented in an open letter named “India Is Inevitable”.
One of the main motivations behind the move is the size that Pei expects CMF to be able to achieve one day. He is convinced that it would be possible for CMF to become capable of producing up to 100 million phones per year. The reason why CMF has suspended the production of smartphones this year is due to the problems with supply chains and the surge of costs of components. At the same time, CMF has been continuing its growth outside the sphere of smartphones, specifically thanks to its TWS line of products.
Under the new organizational form, CMF will incorporate Nothing’s experience in engineering, operating systems and partnerships with suppliers. At the same time, it will utilize the manufacturing, engineering skills and big consumer base of the Indian country. Pei thinks that working on a much bigger scale would give CMF more power when dealing with suppliers and persuade them to design components based on the requirements of the company and not just provide it with standard components.
Why Carl Pei Wants CMF to Become an Indian Company
According to Carl Pei, the decision is driven by his view that India has already developed a strong manufacturing base but still needs deeper capabilities in research, development and engineering. He points to China's consumer electronics industry as an example, where smartphone manufacturers worked closely with suppliers to develop better components and technologies. Over time, that relationship helped create a wider ecosystem capable of supporting globally competitive consumer electronics brands.
Pei believes India has many of the ingredients required to build a similar ecosystem. The country has a large manufacturing base, a growing pool of engineering talent and one of the world's biggest smartphone markets. However, he argues that India is still missing a major global consumer electronics brand capable of creating strong demand for locally developed engineering and technology.
CMF is now being positioned as an opportunity to help fill that gap. By making the company independent and giving Indian shareholders greater control, Pei wants CMF to develop products with more original engineering and design while building stronger connections with India's local technology and manufacturing ecosystem.
Pei also highlighted the decline of Indian smartphone brands over the past decade. According to figures cited by him, domestic brands accounted for nearly 46 percent of India's smartphone market in 2015, but their combined share has since fallen to less than 1 percent. During that period, foreign smartphone companies introduced increasingly sophisticated devices with improved cameras, industrial design and tighter hardware-software integration.
Pei argues that many Indian brands struggled to keep pace because they relied heavily on off-the-shelf designs rather than investing in original product development and in-house R&D. He believes the lack of original design manufacturing capabilities and deeper engineering expertise played a major role in the decline of domestic smartphone companies, even as India developed into the world's second-largest smartphone manufacturing base.
The CMF strategy is therefore about more than simply moving ownership of a brand to India. Pei wants the company to develop greater control over product engineering, technology and supplier relationships. The long-term goal is to create a company that can design and develop products in India while also encouraging suppliers and other businesses around it to build new capabilities.
For Nothing, the move also allows CMF to pursue a different growth strategy while remaining connected to its parent brand. Nothing will retain a stake and continue working with CMF as a partner, while the new Indian entity will have its own team, operations and R&D capabilities.
If CMF can successfully scale its operations, Pei believes it could eventually become a catalyst for a broader Indian consumer electronics ecosystem. His vision is similar to the development of China's technology industry, where local manufacturers and suppliers gradually built the engineering capabilities needed to compete with established American, Korean and Japanese companies.
The transition marks a significant change for CMF, transforming it from an affordable sub-brand launched by Nothing into an independent company with India at the centre of its operations. Whether CMF can achieve Pei's long-term ambition of reaching 100 million smartphones annually will depend on its ability to build products, engineering capabilities and supply-chain relationships at a much larger scale.
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