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The $120 smartphone looking to take on the giants

Wileyfox

Wileyfox, a British smartphone maker, has released its latest device – an £89.99 ($120) phone it hopes will beat the big players on price and value.

The Wileyfox Spark is a 5 inch Android device with an 8 megapixel front and rear camera that is sold out of contract. Wileyfox is hoping to take advantage of the trend of people wanting to buy low-price high-spec smartphones without being locked into long contracts.

The opportunity we saw was that everywhere we looked devices were all really expensive or really poor. Everything seemed to be connected to carrier propositions. Within that, nothing seemed like particularly good value," Nick Muir, chief executive of Wileyfox, told CNBC by phone on Tuesday.

"What we tried to address is to go to a Chinese manufacturing model and secure bestselling and best in class components and sandwich them together."

Muir said that the phones are making money but would not reveal the margins, saying that it is "resolutely double-digit and strong", helped by the lean organization which has just 27 employees.

The Wileyfox Spark is the third device line after the Swift and Storm were launched last year by the young company.

Wileyfox is hoping that it will be able to push beyond its U.K. home market to other areas of Europe. It is already in major markets such as Germany, France and Spain, with Italy and Poland the next countries to follow.

"My personal view is the traditional carrier model is broken. The growth of the SIM free market and allowing consumers to cherry pick the best deals they can is incredibly useful and brings enormous value," Muir said.

Scaling

Wileyfox is a start-up though and faces big challenges in scaling and disrupting the entire market. It is however growing very quickly, albeit off a low base. Globally, shipments of its devices grew 111 percent quarter-on-quarter in the first quarter of 2016 to 57,000 units, according to data from IDC.

As it expands, Wileyfox will also come up against a number of competitors such as Xiaomi, Vivo or Oppo, all low-cost Chinese brands present in a number of markets where the company is looking to expand.

Still, Muir is confident that Wileyfox can scale and is on the hunt for investors to help make hat happen.

"We are a very cost effective organization, but in order to turbo charge the business and turn growth into triple-digit rather than double, we would welcome some new investment," Muir told CNBC, adding that the start-up would need around 25 million euros ($27.6 million) over the course of the next two years.