CMF To Split From London-Headquartered Nothing, Become An India-Based Company

Nothing has decided to spin off its budget sub-brand CMF into an independent company that will be majority-owned by Indian shareholders and headquartered in India, founder and chief executive Carl Pei said in a blog post. Nothing will retain a shareholder stake and continue as a partner to the new entity, while CMF builds out its own team and research and development operations within the country.

Carl Pei's case for India

Pei, a Swedish entrepreneur who spent eight years in China's consumer electronics industry before founding Nothing, argued that India is on track to produce its own global electronics brand, following a pattern he said Japan, Korea and China have each already gone through. He noted that India is currently the world's second-largest smartphone manufacturer and has a large youth population and software workforce, but does not yet have a homegrown brand with genuine in-house engineering capability.

According to Pei, that capability which he termed 'real R&D', is what separates companies built to last from those riding a temporary wave. He listed five markers of genuine R&D - control over structural engineering such as materials and thermals, ownership of camera sensor selection and imaging software, an in-house operating system with a multi-year update commitment, in-house antenna tuning and certification, and direct supplier relationships to co-develop displays, chipsets and camera modules. A company relying on its manufacturing partner for most of these, he said, is choosing a phone rather than engineering one.

Lessons from 2015

Pei pointed to 2015, when Indian smartphone brands held close to half the domestic market and one briefly outsold Samsung in the country, as a cautionary example. He said that lead collapsed within two years once foreign brands entered with stronger engineering, better cameras and improved design, while domestic players largely licensed existing designs rather than building their own. By 2025, he said, those original Indian brands held under 1 percent of the market.

He drew a parallel to his own experience in China's supply chain between 2012 and 2020, when he said Chinese component makers moved from producing lower-end parts to leading categories such as OLED panels and camera modules. Pei attributed that shift to phone makers who pushed suppliers to build capabilities beyond their existing catalogues, arguing that sustained demand from serious engineering teams, not government policy alone, built up the supplier ecosystem over time.

Manufacturing versus engineering

Pei acknowledged that India has made significant progress on manufacturing, noting that 99 percent of phones sold in the country are now assembled domestically, up from a negligible share a decade ago. However, he said manufacturing is only the first step, and that most component-level intellectual property still sits offshore because no Indian brand is currently demanding more than what suppliers already offer off the shelf.

What CMF brings from Nothing

Under the spin-out, Pei said CMF will carry over Nothing's existing engineering foundation, including its in-house Android build, Nothing OS, in-house industrial design work that has won Red Dot and iF awards, and direct sourcing relationships with display, chipset and camera module suppliers. CMF was Nothing's fastest-growing smartphone sub-brand in 2025, according to Pei.

He said the new company will be incorporated, controlled and majority-owned in India, with Nothing continuing as a minority shareholder and partner rather than retaining operational control. Pei set a long-term target of CMF eventually shipping 100 million devices a year, a volume he described as the threshold at which a brand's in-house teams, including its operating system, camera and AI capabilities, become a durable competitive advantage rather than a cost centre.

Published on: Monday, September 21, 2026, 06:08 PM IST