The nail in the coffin was China-based Cyanogen closing down operations of CyanogenMod.

Micromax founders venture Yu Mobiles to shut shop soon
Atom Tech Shorts Friday, May 05, 2017 - 13:26

The Indian mobile phone company appears to have decided to dump its YU brand of mobiles completely and may not release any phones under this brand in future. Though there is no official confirmation from the company, a report by TeleAnalysis are based on reliable sources from within the company who are in the know.  

To recap for you, YU was a brand name for an exciting project initiated by Rahul Sharma, the co-founder of Micromax personally and there were as many as four different smartphones released under this brand from the end of 2014, though Yunicorn, launched in the middle of 2016 was the last from this stable. Almost a year has gone by and no new YU phone has been released. What could be the reason behind this?

People who have been close to the developments in Micromax have the following narrative for the failure of the brand YU and the eventual decision now to close it.

Firstly, many may not be aware that YU was itself not a direct Micromax product, but was made by an independent company YU Televentures. And 99% of shares in this company was held by Rahul Sharma himself and just 1% by the other 2 co-founders of Micromax. The reason this was done, according to the report, was because while Rahul Sharma was keen on floating a separate brand for mobiles to be sold exclusively on the online platform, the other founders and the top management at Micromax did not support this idea.

However, Sharma had claimed that the buyers of the YU brand mobile will benefit greatly from a new OS, Cyanogen and other features the phones will be built around. In addition, Sharma cited the Moto phones example to push for the exclusive online business and felt there is success there. In the end, he had to face disillusionment all round. The first phone Yureka, launched January 2015, though touted as an online only product had to be sold through the traditional brick and mortar retail outlets, within a year. Some of the other products which were promised, like health related fitness monitoring devices and so on also failed to cut any ice with the customers.

The proverbial last nail in the coffin, as it were, hit the YU brand and Mr. Sharma when the OS company in China, Cyanogen Mod closed down its operations. This left Rahul Sharma and his YU brand absolutely stranded and any plans in the pipeline for launching new phones had to be shelved. The final rites on Cyanogen happened on December 31, 2016, but the company had already stopped supporting the hardware makers from much earlier. Some of the other makers, like OnePlus who also had the same OS on their phones moved on, but probably YU did not have the resources to do something to keep the brand floating.

Meanwhile Micromax itself has been struggling with holding on to its position in the Indian mobile phones market. From being the second largest selling brand in India and the best Indian company at that just a few years ago the company has allowed grass to grow under its feet as many Chinese brands like Oppo, Vivo and Xiaomi have overtaken Micromax on the volumes sold as well as the overall market share. A lot may ride on the newly launched Dual 5 model for Micromax.

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