Nothing to spin off CMF as majority Indian-owned company

Carl Pei’s British consumer electronics company Nothing is moving to separate CMF into a standalone Indian company, with the stated aim of doing more than assembling phones in the country.

Nothing co-founder and chief executive officer Pei said CMF will be majority Indian-owned, headquartered in India and supported by its own local team and research and development operations. Nothing will remain a shareholder and partner.

CMF is Nothing’s sub-brand, launched in 2023 to make design-focused consumer technology more accessible at lower price points.

The significance lies in where value is created. India already makes a significant number of the mobile handsets sold domestically, but local assembly does not necessarily mean that the underlying technology, design or intellectual property is developed in India.

Government data published in April put domestic value addition in electronics manufacturing at 18-20%.

In his article, India Is Inevitable, Pei explained that the next phase of the country’s electronics industry has to move from manufacturing towards product engineering and intellectual property.

“Real R&D is the ability to design, engineer and keep improving a product in-house. It’s what separates a company that lasts from one that rides a moment,” Pei wrote.

By R&D, he means controlling areas such as product structure, thermal performance, cameras, software, antennas and key components, instead of relying mainly on a manufacturing partner.

The proposed CMF structure builds on a manufacturing joint venture announced in 2025 between Nothing and Indian electronics manufacturer Optiemus. The latest arrangement takes the relationship further by bringing manufacturing, ownership and R&D together. Optiemus has said it will initially acquire 51.1% of the proposed joint venture, subject to definitive agreements and other conditions.

The companies noted the expanded partnership will build what they describe as full-stack, end-to-end smartphone R&D in India, covering industrial design, mechanical engineering, camera engineering, software, connectivity and component engineering.

The wider smartphone market provides a more complicated backdrop. India’s smartphone market was broadly flat in 2025, according to Counterpoint data, while shipments fell 10% year-on-year in the June quarter of 2026, the biggest decline for that quarter in six years.

At the same time, policy is attempting to push the industry further up the value chain. The government raised the outlay for the Electronics Component Manufacturing Scheme from Rs 22,919 crore to Rs 40,000 crore in Budget 2026, while continuing broader incentives for electronics production and exports.

Global manufacturers are also deepening their India presence. Reuters reported this month that Foxconn and Tata Electronics were ramping up production of Apple’s latest iPhone models in India for export markets, underscoring the country’s growing role in global electronics supply chains.

Pei’s ambition goes considerably further. He noted CMF ultimately wants to reach 100 million phones a year, arguing that scale can give a brand enough influence to shape its supplier ecosystem.

“The only way to get there and stay there is to build in India, not ship to India,” Pei wrote.

Nothing introduced CMF as a separate brand within the company, built around products that emphasise colour, materials and finish while retaining the broader company’s design-led approach. CMF initially expanded across audio, wearables and charging products, and later entered smartphones with the CMF Phone 1 in 2024, followed by the CMF Phone 2 Pro. Its current portfolio includes smartphones, wireless earbuds, over-ear headphones, smartwatches, charging products and other accessories.