Osom Products Inc., a mobile phone company founded by former employees of Essential, is shutting down this week. Much like Essential, the company managed to release one phone before the decision was made to close.
The closure comes amid claims that Osom's former chief privacy officer has filed a lawsuit against the company. Allegations were made that the company ran out of money because its CEO used business funds to pay for personal expenses, including lavish trips and exotic cars.
Internal meeting confirms closure
The decision to close the company was made public during an internal meeting on Tuesday. According to multiple sources who spoke to Android Authority, Osom executives shared the unfortunate news with employees. The company plans to lay off most of its staff by Friday, but they will receive severance pay and continued healthcare benefits.
In response to the Android Authority's report, Osom provided a statement confirming the closure. CEO Jason Keats explained that the company had no choice but to shut down after failing to secure a fresh round of funding, which was crucial for keeping operations running.
CEO statement confirms struggles
“The report in Android Authority is correct; Osom is sadly shutting down. In May 2024, despite making strong efforts, we couldn't attract customers for our mobile phone. At that point, we decided to shift our focus to a new project. Unfortunately, we had to let go of several employees to reduce our burn rate,” stated Keats.
“Due to the difficult market climate for raising funds in the consumer electronics space, we couldn't secure new investment. As a result, Osom's general operations will end on September 6th. However, some minimal maintenance work will continue to meet our contractual obligations,” added the CEO.
Osom's journey and partnerships
Osom was created by Jason Keats and other former Essential employees after Essential shut down in 2020, following poor sales of its Essential Phone and the exit of founder Andy Rubin. Osom initially aimed to produce privacy-focused devices, including a USB-C cable with a built-in switch to turn off data transfer. The company also introduced the Osom OV1 smartphone in early 2022, which had similar goals of enhancing privacy for users.
Later, in 2022, Osom partnered with blockchain company Solana to release a modified version of the OV1, rebranded as the Saga. This new version featured a built-in cryptocurrency wallet and other blockchain-related apps that relied on Solana's ecosystem.
Despite the closure, some engineers will remain on as contractors to fulfil ongoing obligations. They will provide a final security update for the Saga smartphone in December and ensure all commitments to Solana are completed before the company fully ceases operations.
