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Ubuntu Edge crowdfunding campaign ‘doomed to fail’

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The Telegraph by Sophie Curtis | August 10, 2013

Canonical's ambition is admirable, but with less than two weeks to raise another $23 million, the chances of the company meeting its crowdfunding target are slim, says Sophie Curtis.

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The Ubuntu Edge will have a 4.5-inch 1,280 x 720 HD display and will run both the Ubuntu phone operating system and Google Android. Photo: The Telegraph

Canonical, the software company behind the Ubuntu Linux open source operating system, launched a crowdfunding campaign on 22 July to raise money for the development of its flagship smartphone, Ubuntu Edge, which it says will launch early next year.

The Ubuntu Edge will have a 4.5-inch 1,280 x 720 HD display with "pure sapphire crystal" touchscreen rather than glass. It will have a 8MP rear and 2MP front camera, and run both the Ubuntu phone operating system, which launched in January 2013, and Google Android.

The company hopes to raise $32 million (£21.5m) using crowdfunding website Indiegogo. In return for a pledge of £446, backers will receive their very own Ubuntu Edge smartphone in May 2014, after the device launches, and will also have an opportunity to participate in the final selection of some of the materials and software capabilities.

The Ubuntu Edge smashed crowdfunding records on the first day of its campaign, raising $3.5 million (£2.2m) in just 24 hours. After that, however, the rate of contributions decreased dramatically, and at the time of writing the company had raised just over $9 million (£5.8m) - a rate of £320,000 a day.

In order to meet its target, Canonical now has to raise over £1 million in backings per day - a challenge which some say is insurmountable.

According to Jason Waddell, consultant at Open Analytics, one of Canonical biggest mistakes has been repeatedly changing the amount of money that backers have to pledge in order to secure an Ubuntu Edge smartphone.

First the company said that anyone who pledged $600 (£394) on the first day, or $810 (£532) thereafter, would get a device; then it introduced a system where a fixed number of devices were available at different price tiers rising to $775 (£592); then finally it announced that the price would remain fixed at $695 (£446).

"Although the device sports impressive hardware, Canonical's asking price of $775 proved far too high for a speculative purchase in a marketplace filled with proven devices," said Waddell.

"I expect the $695 price point to bolster consumer interest, but the outlook is still bleak. $695 is a lot to ask for what is ultimately a speculative purchase. When I shop for electronics I do a lot of research. I try the product in stores to see how it looks, see how it feels. I don't think I would ever pay $700 for a device sight unseen."

He added that Canonical's campaign rewards are very sparse, and although there are 5 reward levels - at $20, $50, $695, $10,000 and $80,000 - there is little incentive to pledge more than the price of a single phone, even for the hardcore Ubuntu enthusiast.

By comparison, other successful crowdfunding campaigns - like the Pebble watch, which raised over $10 million - have boasted a broad spectrum of options, with upwards of a dozen pledge tiers between $5 and $500 alone.

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