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Ubuntu smartphone axed after crowdfunding drive fails

Arjun Kharpal, special to CNBC.com
Thursday, 22 Aug 2013 | 3:08 AM ET
Ubuntu

The firm behind the much anticipated Ubuntu Edge has been forced to abandon the smartphone project after it failed to meet an ambitious $32 million crowdfunding target on Thursday.

The Ubuntu Edge, a hybrid smartphone-PC device that was designed to run on Ubuntu's open source software as well as Google's Android, had generated substantial interest among tech enthusiasts.

The crowdfunding effort raised $12.8 million, but fell nearly $19.2 million short of its aim. It did, however, beat the previous record for the most money pledged via crowdfunding of $10.2 million.

(Read more: Ubuntu looks to disrupt smartphone market with $675device)

Canonical, the company which was developing the phone, said there were some positive takeaways from the crowdfunding drive, which was hosted on the website Indiegogo.

"If you watch the reaction to the product and the speed at which pledges were made, and the fact we broke records, it proves the need and desire for a device like this," Jane Silber, Canonical's CEO told CNBC.

Silber said the project was the first of its kind and this may have put off potential investors.

(Read more: An 'emerging' threat to Samsung, and it's not Apple)

Ubuntu fundraises for PC/smartphone cross
Jane Silber, CEO of Canonical, talks about Ubuntu phone, a cross between a PC and smartphone, which is being financed by crowd funding.

Ian Fogg, a mobile analyst at IHS Global Insight said Canonical's crowdfunding drive was an effective marketing tool.

"Canonical still gained tremendous exposure in the media, they've also established a relationship with a large number of people that did pledge to back the device which, they didn't have previously. So in that sense, it has been a success for them," Fogg told CNBC.

The phone isn't completely dead. The company is turning its attention to releasing a more stripped-down version of the phone in the first quarter of 2014 using the traditional route of finding external hardware manufacturers and teaming up with network providers.

The new phone won't be the "formula one" Ubuntu Edge-style device, according to Silber, and it will be aimed at more of a mass market. Mobile operators could back the device as they seek more competition and a larger choice of devices.

(Read more: Smartphone 'saturation' fears for Apple, Samsung)

"We are convinced that there is an opportunity for another mobile player and that the market is not locked up," Silber said.

According to Fogg, the company is in talks with carriers including Veizon and Deutsche Telekom as well as hardware manufacturers.

But Fogg admitted a future Ubuntu phone will face stiff competition and needs a unique selling point to break into the competitive smartphone market.

"The challenge Canonical will have is that not only are they coming to the market late, they are late among the latecomers. What they need to do is find a different angle, a different way in."

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