Canonical’s Gambit

An interesting crowd-funding play with the futuristicUbuntu Edge smartphone

Yesterday, at around 4pm GMT, news dropped about Canonical, the firm behind the Ubuntu Linux distribution and related commercial concerns, launching a crowd-sourcing campaign to fund the development of a high-end flagship smartphone, a halo product, to showcase their forthcoming mobile operating system Ubuntu Phone.

This would have been noteworthy in and of itself, it’s pretty unusual for commercial enterprises to turn to crowdfunding but what made the news catch fire on tech blogs last night was Canonical’s ambitious goal: to raise $ 32,000,000 in 31 days.

This is unprecedented.

The most high profile consumer electronics products funded via crowdfunding are the Pebble e-Watch that raised over $10m and the Android based Ouya game console that raised over $8.5m. Both used Kickstarter, the most prominent crowdfunding platform and both were first time products from start-ups created for the purpose of bring these products to life. They significantly exceeded their initial goals, which now seem modest, $100k in the case of the Pebble and $950k for the Ouya. In both cases this led to significant delays in the bringing the products to market as it meant manufacturing far more units than originally envisioned, however it has meant that both firms were able to fast-track commercial distribution of their products reaching beyond the crowdfunding community who effectively pre-ordered them; Pebble has just signed a deal with Best Buy and the Ouya is available on Amazon.

Canonical have elected to use Indiegogo as their crowdfunding platform and the difference with the Ubuntu Edge is that it is be promoted by an established company. Canonical’s stated goal is to create a device that is specifically for the smartphone Otaku — those truly obsessive early adopters who just have to have the absolute latest, most cutting-edge gadget.

The device itself promises to further Canonical’s vision of a truly converged device. It will run both Ubuntu Phone and Android (version number unknown) and double as a computer running the full desktop version of Ubuntu when plugged into a monitor (via HDMI) and paired over Bluetooth with a keyboard and mouse or trackpad.

They’re not the first to try this, Motorola (pre-Google acquisition) did this with the Atrix which was ran a lightweight Linux based desktop OS called Webtop that offered a full version of the Firefox web browser as well as file management and a few other features when placed into a desktop dock or laptop style dock. It was a very interesting concept that was constrained by the technology of the time and has subsequently been abandoned by Motorola.

Canonical claim that the Ubuntu Edge has been optimized for both the mobile and desktop experience and that it has the specs and horsepower where it counts to make this happen. While light on precise technical details it has outlined some key points:

On paper this sounds impressive and like it will be up to the task of powering the converged computing model of the future that Canonical is pushing.

It is an ambitious play but Canonical is approaching this in a way that limits their liability. They will only build the Ubuntu Edge if they hit their crowdfunding goal of $32m which, given how they’ve structured the funding tiers, will yield a limited run of around 40,000 devices. Hardly a mass-market device. If the goal is not met the device will not be produced and would-be backers will be refunded.

Right now, after about 15 hours after going live the campaign has crossed $3.2m and the “One Day Only” tier of $600 per device has sold out — it was limited to 5,000 pledges and each pledge is now at $830 per device with additional tiers at $20 for those who simply want to give the idea a thumbs-up, $10,000 (limit of 50) for those who want early access to the device and the development process and $80,000 for companies who want to pre-order 100 devices. Update (7/24): the $600 tier sold-out before hitting the 24-hour expiration. The $830 tier was at around 600 pledges but has just been reset to zero and new tiers at $625, $675 and $725 have been added with a limit of 1,250 units per tier. Clearly Canonical are experimenting with price positioning and yield management to stimulate demand and keep up a steady flow of pledges. I assume that the people who pledged at $830 now have the chance to get in at a lower tier.

Personally I’m very excited about both the device itself (needless to say, I have pledged) and the process by which Canonical has approached this. As a risk mitigation strategy for firms who want to test their ideas and potential demand for their products, albeit in a very public forum, it appears to make a lot of sense.

The success of failure of the campaign itself will not have any bearing on the Ubuntu Phone OS itself which is destined for mid-range handsets for mass-market distribution in 2014.

The target date for the Ubuntu Edge to ship to backers is May 2014.