No one wanted the Essential phone. Will anyone want Essential?

Not long after Bloomberg’s report hit the Internet, Essential founder (and former Android boss) Andy Rubin responded to it on Twitter. According to the informants, the development of a new smartphone, about which we reported in the beginning of last month, was stopped, and all the involved resources have been deployed to a new project to create a product for smart homes. What’s interesting here is that he suggests they are putting extra effort into “game-changing” products, which they must believe is their smart home hub.

Bloomberg reports that the startup portion of Rubin’s company, Playground Global, has raised about $300 million from investors that include Amazon.com Inc., Tencent Holdings Ltd., and Redpoint Ventures.

The rumored sale is not final though “private” talks are said to now be in progress, with the possibility of Essential’s hired talent being a part of the deal should an agreement be made and if the sale moves forward. The first Essential phone was initially promoted as a competitor to Apple’s iPhone due to its design and what was supposed to be Essential’s ability to be used easily by wireless connections with other intended devices.

The Essential Phone was a promising flop that had us excited for the sequel. Last year, it was valued around $1 billion in advance of the Essential Phone launch. This won’t be surprising since around the same time a year ago, Rubin announced the Essential Home complete with an intelligent assistant and a rounded display, which never saw the light of day. The company reportedly sold only 150,000 units of the PH-1 and spent more than $100 million in development. Those dreams look to be crushed now, with Rubin’s company canceling its second device. The company hasn’t yet made a final decision on a sale, the people said. That way, it can stay in the smartphone game and get out of the hard development process at the same time.

Update: The Information has obtained an email from Andy Rubin sent to Essential employees saying that he is “not shutting down the company” and that “no one (including me at this moment) knows what the best thing for the company will be”. But those who wanted an Essential Phone 2 will be disappointed, especially considering that even the company itself could be sold. The publication cited Brian Wallace, the original vice president of marketing, and Joe Tate, the head of hardware engineering, as examples of Essential’s inner turmoil.