Foxconn Invested $80 Million in Cyanogen

[dgstorm]

There were some faint rumors a few weeks ago that Foxconn was involved in the Series C investment of Cyanogen back in March. It turns out these rumors were true. A new report confirms that Foxconn did indeed invest $80 Million dollars in Series C investment fund money to help grow the budding Android OS alternative developer. Here's a quote with a few more details,

It appears the Series C was first reported back in March, with Twitter, Telefonica, and News Corp owner Rupert Murdoch all taking part.

Which makes the latest Foxconn announcement all the more confusing. It's unclear why Foxconn was only now named as an investor.

Nonetheless, the $80 million Series C (as it was described two months ago) brings Cyanogen's total funding to $110 million.

Cyanogen says it plans to leverage the latest investment to hire more employees and further build out its OS platform, which according to Cyanogen, "will create a more open, level playing field for third party developers." ~ ZDNet

What do you guys think? Are these companies that are investing in Cyanogen going to see a return on their investment or are they just throwing their money away?

 

[kodiak799]

My guess the play here is one or two things, possibly both:
1) Google will pay billions to buy-off a potential competitive threat, or a Sammie or MS will buy them
2) Cyanogen has or is getting patents for some killer features

I'm not sure the quality and simplicity is there for the mass market. I don't think the above will pay off. No, I think this is just a flier that sometime in the next few years OEM's and Providers are going to do a 180 and unlock phones at EOL, which would create a void Cyanogen could step into to continue to support and provide updates. In other words, some degree of outsourcing support to Cyanogen. In that scenario, Cyanogen could easily be worth several billion. However, the reason I don't see this happening is "forced obsolescence" is what keeps feeding profits of the Providers, and particularly the OEM's - Verizon wants to lock you in for 2 more years with an upgrade, and Sammie wants to sell you that upgrade.

Now China and developing markets, maybe there's an opportunity for Cyanogen there if phones are less locked down. But I don't see them making much money in the US.

 

[kinfolk248]

Cyan doesnt matter their own OS, so I dont see them being a true competitor until they do. You can beat someone if you are relying on them for food (android os). I see Windows, if they got for real serious, having a better survival chance than Cyan. Ppl are just buying in now on the ground level with big dreams but they way Cyan makes then breaks partnerships every 60 days isnt healthy...

 

[Jeffrey]

I think Cyanogen's opportunity is in the emerging device manufacturing arena. Many of these Chinese manufactures are offering an unlocked totally open device with a stock Android experience. They also provide a flashing tool and a choice of optional ROMs. Or, you can flash any hardware compatible ROM.
The real issue is Cyanogen's inability to get along with these manufactures.

 

[cerisecons]

Isn't Foxconn one of the main manufacturers of Apple products?

 

[Jeffrey]

Isn't Foxconn one of the main manufacturers of Apple products?

Yup

 

[kodiak799]

Well, Android is open-source, so Cyanogen could one-day have its own proprietary branch.

If you look at the investors:
Telefonica is a global telecom with a major presence in developing markets

Foxconn people are probably familiar with, and they are moving into their own brand of phones, phones that might want to run Cyanogen or outsource support.

And I think Cyanogen has kind of hinted in some of their comments they are looking at emerging markets. So maybe not such a crazy investment after all. But I don't know how that translates to profits since there's not much money in an OS for emerging markets, Google has search locked up, and Google/Developers get Playstore ad revenue (if you use Playstore, which Cyanogen is DOA if they don't).

 

[Jeffrey]

Cyanogen can easily launch their own Play Store.

 

[kodiak799]

Cyanogen can easily launch their own Play Store.

Yep, that's all you need. And then wait for money to come rolling in. Just ask Amazon.