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Photo credit : stokkete / 123RF.

Bangalore-based Creo launched its smartphone, the Mark 1, in April this year. The idea was to launch a phone with a focus on its Android-based software. Top investors including Sequoia bought in, investing US$3 million into the company.

But just over six months in, the startup has ditched its phone making plans and has shifted focus entirely to building its operating system, Fuel OS. It sold around 1,000 smartphones (analyst estimates, Creo did not reveal sales numbers).

Creo chief executive Sai Srinivas told Tech In Asia that ditching manufacturing was a part of the plan, as the Mark 1 was intended not to take on big rivals in the smartphone industry, but to showcase the OS it was powered by.

“The idea was to build an always evolving OS with new features every month and take this experience to as many people as possible. Right from the start, the plan was to partner with other phone makers in the market. Very soon, you’ll hear about our partnerships in this regard,” said the former Zynga and Bharti Softbank employee.

“The home-grown tech startup will join the exclusive niche of global companies that produce smartphones by developing both, a proprietary software OS and the smartphone itself,” was what the company said while announcing the funding round from Sequoia, BeeNext, and India Quotient.

Sequoia had not gotten back with to us at the time of publication.

The company will consider introducing new models as they bring in major software upgradations. But for now, the future of Creo rides on the OS.

Creo, which was formerly called Mango Man Consumer Electronics, first became popular for its streaming device called Teewe. The device launched its latest version last year, and was considered an alternative to Google’s Chromecast.

Teewee was also one of Microsoft Ventures’ graduates last year. Before its seed funding round in March 2015, Creo’s parent company had raised angel investments from Palaash Ventures, Hike founder Kavin Bharti Mittal, Pavan Ongole of Bharti SoftBank, and former chairman of Alcatel Lucent India Arun Seth.

Android to win

Sai Srinivas, CEO and co-founder of Creo.

Focusing solely on the OS means Creo will have to build a considerable niche for itself in a country where Android controls about 97 percent of the market.

“Most other available Android-based operating systems in the market are mere skins of each other. What makes us different is that with our operating system we will stay true to the stock Android UI which we all love, and instead work on building OS level features unheard of on any other smartphone,” said Sai during the launch.

The crew has been regularly updating the operating system to introduce new features, but the initial launch was not without ceremony about the phone itself.

Creo even announced a list of genuine spare parts for the phone, detailing speaker, battery, and back panel costs, among others. Review sites evaluated it as it would, say, a new phone by Xiaomi. It had announced plans to launch 106 service centers in 96 cities, offering a phone pick up and drop service available in 15 of those cities, and to get to 300 service centers across 150 cities eventually.

Sai told Tech In Asia it will keep its promise to service the smartphones units sold.

Out of stock

When Creo launched its smartphone in April this year, there were about 150 different smartphone brands available in India, Tarun Pathak, senior analyst at Counterpoint Research told Tech in Asia.

While analysts think building an OS-based model can be a good way to keep away from the multitude, there are also misgivings.

Photo credit : photochicken / 123RF.

Industry experts say six months is not long enough to build a base of enthusiastic users, not least because the Android skin was till now only available on the Mark 1.

“[It] can be a good strategy, but Creo needs to build good and sustainable partnerships. Most of the brands in the sub US$100 segment are looking to differentiate their products through any means and take a model-led approach rather than long term industry point of view,” Tarun said.

“In such a scenario, Creo needs to partner with OEMs which have control on hardware and are also looking for a software differentiation, like Lenovo, Lava, and others.”

There are also rumblings of undersold Mark 1 phones sitting on shelves.

“What we hear is the phone barely shipped around 1,000 units and has also undergone price cut for the excess inventory in July,” Neil Shah, another analyst at Counterpoint Research told Tech in Asia.

For now, the phone is listed as “out of stock” on Flipkart, as well as the company’s home page.

This post Sequoia-backed Creo stops smartphone production after 6 months, goes OS only appeared first on Tech in Asia.

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