U.K. smartphone manufacturer Wileyfox descends into bankruptcy
Wileyfox, the U.K.-based smartphone manufacturer specializing in budget phones, has gone into bankruptcy proceedings (or “administration” as it’s termed in the U.K.) with the administrative receiver Quantuma.
The news came via a post on the /r/Wileyfox subreddit, with Wileyfox-Jack breaking the news that his job had been lost as a result of restructuring, and lamenting that he would no longer be able to offer official support to the community.
“Wileyfox Europe Limited is in Administration. Andrew Andronikou and Andrew Hosking are appointed joint administrators and act jointly and severally without personal liability,” Jack said. With some emotion evident, he also added “Today is a sad day not just because I lost my job but because I believed in the Wileyfox brand :(“. It’s clear from Jack’s post that the thirty-strong Wileyfox team (as they were) had a strong bond. According to The Register, as many as twenty staff members have lost their jobs.
Wileyfox was one of the earliest startups to take advantage of the Android fork Cyanogen, after the rogue Android build split off from Google in 2015. After Cyanogen shut down in late 2016, Wileyfox switched over to Android, and began to offer significant price cuts in exchange for lock-screen ads on new phones.
But it seems that Wileyfox’s money troubles weren’t wholly based on a lack of sales. While Wileyfox never spoke officially about its funding, details from the administrative process have revealed that significant amounts of Wileyfox’s backing was tied into the Russian bank Promsvyazbank, which was bailed out by the Russian government in December to the tune of $3.4 billion. However, as pointed out by Techcrunch, it’s clear that Wileyfox was struggling prior to the Russian bank’s failure, with the company recording a 1.5 million British pound (roughly $2 million) loss in April 2017.
At this time it’s not clear what the plan regarding Wileyfox will be, but it’s fair to assume that extreme cost-cutting will be norm while a buyer or extra funding is sought. A source speaking to Techcrunch blamed a lack of penetration into the budget market as a large part of the reason for the company’s current failure, with strong competition from Huawei and other budget brands as the primary reason that Wileyfox phones failed to find mass appeal.
The future of overseeing Wileyfox Group and Wileyfox Mobile are currently unclear based on current events, and no one seems to yet know whether they too will be pulled into administration.
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