Nothing Spins Off CMF as Standalone Indian-Owned Consumer Electronics Firm

Nothing CEO Carl Pei announced on September 21, 2026, that the company will spin off its CMF sub-brand into a standalone, majority Indian-owned firm. The new entity, which will be headquartered in India, aims to establish a comprehensive research and development (R&D) ecosystem to produce 100 million devices annually. While Nothing will retain a minority stake and continue to provide engineering, software, and supplier support, the move marks a strategic shift toward building an independent, India-based global consumer electronics brand.

In an open letter titled India Is Inevitable, Pei argued that while India has successfully established a robust manufacturing ecosystem, the next critical phase for the country is to transition from Make in India to Engineer in India. Pei emphasized that true global competitiveness requires domestic control over product design, thermal engineering, camera development, software, and antenna systems. He noted that Indian smartphone brands previously lost market share to international competitors around 2015 due to gaps in engineering and product capabilities, asserting that the better-engineered phone wins in the global market.

The Union Cabinet approved the Rs 62,500 crore Mobile Phone Manufacturing Scheme for FY 2026-27 to FY 2030-31, providing a 5% incentive for Indian brands and an additional 3% incentive on eligible sales for domestic product design and R&D. To qualify for Target Segment 2 R&D and brand incentives under this scheme, entities must be majority Indian-owned with over 51% shareholding, retain management control in India, and maintain all registered IP, trademarks, and in-house design capabilities domestically.

Pei drew parallels between India's potential and the historical development of electronics industries in Japan, China, and South Korea. He highlighted India's large youth population, significant smartphone market, and existing software expertise as key assets. The new CMF entity will focus on developing its own R&D and engineering teams to create products for both the Indian and global markets. This restructuring builds upon previous initiatives, including a joint venture announced in September 2025 with Indian manufacturer Optiemus, which involved a $100 million investment over three years.

CMF's long-term target of 100 million phones per year is intended to provide the scale necessary to influence component suppliers and dictate product specifications. By moving beyond simple assembly, the company aims to spur local suppliers to evolve their own capabilities, creating a self-sustaining cycle of innovation. The company currently maintains a portfolio including the CMF Phone 2 Pro, audio devices, and wearables, with a broader roadmap that includes future Nothing and CMF product lines. The transition follows the registration of CMF as an independent Indian entity earlier this year.