“Daughter” “Rostec” will release first Russian budget smartphone

Alternative YotaPhone

The holding company Ruselectronics, which is part of state Corporation rostec, is planning to release new smartphone and tablet fully assembled in Russia. About it on a press-conferences were told by the CEO of Ruselectronics Igor Kozlov. According to him, the development of devices will take at least three years.

Russia already had experience of creating a smartphone — YotaPhone by Yota Devices, but this product does not become popular because of the high prices (from 21 990 rubles for the flagship model. — ), says Kozlov. The cost of a new smartphone and tablet from Rostec should not exceed $200.

The development and production of the devices will deal with businesses that are part of Ruselectronics: Kaluga plant of Telegraph equipment (KZTA) will be responsible for the design of the Central research Institute “Cyclone” — for the production of OLED-displays, and several companies for the manufacture of electronic components, said Kozlov.

CEO of Ruselectronics could not name the sum that will be required for the project. According to him, the company now discuss the cost of release of the smartphone and tablet. For comparison, the costs of development and promotion of the two models of the YotaPhone amounted to $50 million, wrote the newspaper “Vedomosti”, with reference to the CEO Vladislav Martynov, yotadevices in October 2014. If Ruselectronics will produce smartphones in Russia, not in China or Taiwan, then they may need more than $50 million, according to the Director of the Department of telecommunication services J’son & Partners Consulting Kirill Kucherov.

YotaPhone: from Scartel to Hong Kong

High lobbyists

Yota Devices was founded in 2011 as a result of the transaction the assets restructuring of the telecommunications operator Scartel (Yota brand, today owned by MegaFon). In 2014 rostec acquired a 25.1% stake in the company (such share to restructuring the Corporation owned in “Skartela”). The General Director of “Rostec” Sergey Chemezov was the chief lobbyist for public development Yota Devices: in 2010 he demonstrated a prototype of the future smartphone Dmitry Medvedev, who at that time held the post of President of Russia, and in 2013 gave new already Medvedev Prime Minister.

Only Yota Devices has launched two smartphones – YotaPhone and YotaPhone 2 (third generation smartphone will be out in 2016). The President of Russia Vladimir Putin gave YotaPhone 2 Chairman of China XI Jinping during his visit to China in November 2014.

The main feature of the device from Yota Devices is the presence of two screens: the second, black and white, created by technology e-ink (E-ink) and always stays on. Head office Yota Devices is located in Moscow. The company does not disclose financial results. Assessment of the research company IDC, within four years, Yota Devices has shipped 70 thousand smartphones worldwide.

Complex transaction

In October 2015, the company announced that 64,9% of its shares for $100 million will buy Hong Kong investment holding REX Global Entertainment: their shares have agreed to sell the co-owners of Telconet Capital Fund Sergei Adonyev and albert Avdolyan (before the announcement about the deal they controlled 64,9% Yota Devices, a further 10% were at the management company). All of Yota Devices for the transaction was valued at $154 million, also REX Global has announced plans to invest in the asset amount, comparable to the cost of the launch of the YotaPhone, — $50 million.

The parameters of the deal changed because of the position of the listing Committee Hong Kong exchange, where shares are traded REX Global. Trading platform suspected investholding that buying Yota Devices in fact, may represent a reverse takeover, when the object of purchase is worth more than the buyer. Now, according to the newspaper “Vedomosti”, REX Global is discussing the purchase of 30% of the manufacturer YotaPhone for $46.2 million

Also the Hong Kong holding is willing to assume part of the debts Yota Devices before Telconet: $7 million loan to the Cyprus “daughter” of the Fund and $27 million loan subsidiary registered in the British virgin Islands. Reporting REX Global was specified that the net loss, Yota Devices has grown from $19.9 million in 2013 to $42.3 million at the end of 2014. The representative of yotadevices did not respond to a request.

Kozlov has ambitious plans: two years after the launch of the project, the holding expects to sell 10 million smartphones, including in the framework of public procurement, General practitioners, police and other employees of budget organizations (according to Rosstat, in 2014 in Russia was 14 million state employees). Although Russia and needs its own smartphone sales target of 10 million devices a year is impossible, says leading analyst Mobile Research Group Eldar Murtazin. In 2015, the total number of shipped in the Russia of smartphones of all brands amounted to 25.3 million units (according to J’son & Partners Consulting).

The substitution in question

To create a completely domestic product, “Roselektronika” lacks two key components of the smartphone mobile operating system and CPU.

YotaPhone is based on the Android operating system (owned by American Google) and is equipped with Qualcomm processors, but the smartphone can be called domestic only if it has Russian operating system and processor, says Kozlov. However, if after three years, the Russian companies will not develop competitive software and will not launch the production of chips, Ruselectronics is ready to use the Android OS and Taiwanese or Chinese processors, recognizes the head of the holding.

The substitution in IT

2 billion roubles spent by the company “Baikal electronics” to establish their dual-core processor Baikal-T1

$60 will cost the Russian Baikal CPU-T1

2.8 bln reaches the cost of the project “national system of payment cards”, which is similar to Visa and MasterCard

200 thousand rubles were the cost of the first personal computer with the Russian processor “Elbrus-4C”

70 thousand smartphones shipped Yota Devices all over the world for four years

Data: IDC, Tjournal, Ruselectronics

According to Kozlov, while in Russia there are no analogues to the operating system (OS) and processor, which are used Yota Devices. Authority responsible for the establishment of a domestic operating system for smartphones and tablets, is the Ministry of communications, and Ruselectronics leads with the Ministry of the dialogue, he says. The representative of the Ministry of communications did not respond to a request . As previously reported , the Russian operating system can be created based on open-source Sailfish being developed by Finnish company Jolla. Kozlov says that this OS has a chance to become a platform for Russian devices. Jolla co-owner is the Russian shareholder of ESN group Grigory Berezkin. In June 2015, the project to create a mobile OS, Jolla presents, “Yandex”, and ESN group, took first place in the direction of the mobile OS among the priority projects for the import substitution of domestic software. On the financing of priority projects of the Ministry of communications requested from the budget 18 billion rubles In February of 2016, it became known that the government plans to allocate 5 billion rubles for the creation of the Russian software and its promotion abroad.

What else has developed Ruselectronics

Its booking system

Ruselectronics has finished constructing the Russian system of reservation, said General Director of holding Igor Kozlov. Domestic development should be similar to the international global reservation systems Amadeus and Sabre tickets, Kozlov added.

“It is a question not only of import substitution but also of independence”, — said the head of “Roselektronika”. Ticket systems, which today are the Russian airlines and travel agencies are foreign, he said. In “Roselektronika” believe that Russia should have its own detailed system: it is “one of critical factors” of the carrier.

The first tests

Domestic development is now undergoing testing in one of the airlines, said Kozlov. He refused to call her. After the testing period is over, Ruselectronics is planning to bring this system to the Russian market. All pre-Russian airlines said that they are ready to move on to the domestic system if it meets the requirements, and translation into it with Amadeus and Sabre “will be painless,” says Kozlov. “I hope that this will happen before the end of 2016,” he predicted. For the first nine months of 2015, the airlines carried about 1.4 million passengers were told in January 2016, Minister of transport Maxim Sokolov.

In Russia there is a manufacturer of processors fully national Assembly — the “Moscow center of SPARC technology” (MCST). However, the company cannot be a partner Ruselectronics in the new project as it creates the processors for desktop computers, not mobile devices, says Kozlov. Another Russian manufacturer of processors — the company “Baikal electronics”, which produces your chip in Asia. The representative of the “Baikal electronics” Andrey Malafeev, explains that in Russia and Europe, there are no factories capable of producing chips with production technology of 28 nanometers.

YotaPhone on the way to Hong Kong

Yota Devices, 25.1% of which are owned by “Rosteh”, released on the market two smartphones — YotaPhone and YotaPhone 2: their feature is the always-on second screen (made on the basis of electronic ink e-ink). According to the research company IDC, within four years of operation, the company shipped 70 thousand smartphones worldwide.

In October 2015, Yota Devices has announced that 64,9% of its shares for $100 million will buy Hong Kong investment holding REX Global Entertainment: their shares in the company agreed to sell the co-owners of Telconet Capital Fund Sergei Adonyev and albert Avdolyan. Later, the deal has changed: the listing Committee Hong Kong exchange, where shares are traded REX Global, suspected that the deal may represent a reverse takeover, when the object of purchase is worth more than the buyer. Now REX Global is discussing the purchase of 30% of Yota Devices for $46.2 million in addition, according to “Vedomosti”, the company is ready to assume part of the debts Yota Devices before Telconet.