Yota Devices revealed today that it is canceling its plans to launch the YotaPhone 2 in the US, citing complications with its manufacturing partners. According to an email sent to backers of the phone through Indiegogo and obtained by The Verge, the company says "the reason for our cancelled launch is due to unforeseen delays including both production and delivery of the North American variant of YotaPhone 2 from our manufacturer" and "the logistics were insurmountable and the device would simply arrive too late." It says that a delay in delivery of the YotaPhone 2 to North American customers would have caused conflict with its plans for 2016 and that Indiegogo backers would still be waiting for the device when other regions were already getting newer, better, and less expensive YotaPhones.
The company is providing two options for those that backed the crowdfunding campaign, which launched earlier this month. Backers can choose to receive the international version of the phone, though it lacks support for LTE in the US and will only get HSPA+ service on T-Mobile and AT&T. Alternatively, they can request a refund, but the exact logistics of how the refund will be delivered to them are still being worked out, according to the email.
Backers can opt for the international version or ask for a refund
The Indiegogo campaign raised nearly $300,000 from backers that were interested in the phone and put down a minimum of $500 to receive one. It met its funding goal before it closed on July 26th. Yota now says that it is partnering with a new manufacturer that can "support the scalability we need in order to quickly bring YotaPhone to various regions around the world, including North America." But it seems that it will only be ramping up production with that partner for its next generation device, which has yet to be announced.
A new manufacturing partner is lined up for the next generation YotaPhone
The YotaPhone concept is an interesting and appealing one: it has a low-power E Ink display on its back that can be used to display all kinds of information without affecting battery life nearly as much as the standard color LCD on the front side of the device. It's something that no other smartphone currently offers, and it's clear that there is at least some demand for this concept. But though it may seem like anyone can make a smartphone today, it's clear that building one at scale and delivering it to customers across the world is no easy task, and Yota unfortunately learned this the hard way. You can read the full contents of the email sent to Indiegogo backers below.
Dear Indiegogo backer,
It’s with a very heavy heart that I have to share the news that we are canceling our launch of YotaPhone 2 in North America. This has been a difficult decision for us as a company, and we’d like to offer our sincerest apologies to the many people who have supported us.
The reason for our cancelled launch is due to unforeseen delays including both production and delivery of the North American variant of YotaPhone 2 from our manufacturer. This despite spending months finalizing and securing the deal to bring to life the North American variant of YotaPhone 2, and when we launched this campaign we were confident our supplier would be able to follow through with their commitment. This was a shock to everyone at Yota Devices, and our leadership team, including our CEO, met with the manufacturer last week in a last-ditch effort to find a solution but the logistics were insurmountable and the device would simply arrive too late. In turn, we believe that the likelihood of a severe delay in these shipments would have created a conflict with our international road map for 2016, leaving Indiegogo supporters behind when customers in other regions will be offered a newer, cheaper and better YotaPhone.
What Happens Now:
As a result of this situation, we have two proposed options for our loyal Indiegogo YotaPhone backers.
1. For those who are avid fans of our hardware and innovation, we offer you the option to receive an International version of YotaPhone 2 (YD201) in Black only. For those backers living outside of North America, this is the exact phone we already planned to send you. For those living in the US, this phone will work with major GSM carriers including AT&T and T-Mobile. The unfortunate situation is that it will remain locked to HSPA+ (3G/3G+) bands and will not be active on 4G/LTE.
2. For those of you who are not interested in the International YotaPhone 2, you’ll have the option to request a refund. We’re still figuring out the logistics for this, but the refunds will not be charged back to your credit card. We will instead send a reimbursement to you directly.
In the next week we’ll follow up separately with each of you to confirm your choice and share refund updates or shipping timelines based on your choice.
The good news is that, as a result of our growth, we are bringing on a new manufacturing partner who can support the scalability we need in order to quickly bring YotaPhone to various regions around the world, including North America. This includes delivering a new generation YotaPhone with the latest specs and technologies, but also at a lower cost, to allow us to offer better value to our customers in 2016. We hope that you'll stay patient with us long enough so that we can deliver on this.
On a personal note, this news is a shot to the stomach for me as I started with Yota Devices last year with one goal: to put YotaPhone in the hands of customers in North America. In fact, I was such a huge fan of YotaPhone that I personally contacted Vlad, our CEO, to offer to lead these efforts which he was kind enough to grant me. Since then it’s been an amazing experience introducing YotaPhone 2 throughout the country and seeing the genuine excitement around our innovative smartphone from operator, retail, media and development partners. Though, as you can imagine, it’s not an easy life for a startup smartphone company and the aforementioned manufacturing difficulties have been one of the biggest challenges we've faced. However, I personally remain committed to delivering YotaPhone to the Americas and now I shift my focus to 2016.
In closing, and despite the circumstances, I want to say Thank You to all of you, for your support and excitement around YotaPhone 2. I also want to extend my thanks to the Indiegogo team for the opportunity and support they've given us.
Update, 3:35PM, July 31st, 2015: Yota has posted an update to its Indiegogo campaign page with more information for backers.