PRESS: Rostec says Chinese partners underinvest in Yota Devices

MOSCOW, Mar 15 (PRIME) -- Electronics maker Yota Devices has no money for mass production of the YotaPhone 3 smartphone and its launch, business daily Vedomosti reported on Wednesday, quoting Sergei Chemezov, head of Russian state corporation Rostec, a major owner of Yota Devices.

The Chinese shareholder, China Baoli, will not give the money. It used to be more interested in the manufacture of the YotaPhone, but now it is not active, “although Yota Devices has already created the third version of the YotaPhone,” Chemezov said.

Yota Devices was established in 2011 in a spin off from Internet provider Scartel, working under the Yota brand. The company designed various mobile devices, including two generations of the YotaPhone with a second screen working on e-ink.

The YotaPhone 3 with a screen diagonal over 5 inches was to appear in the middle of 2016 and was to be sold at U.S. $550–600. The manufacturer wanted to sell over 1 million smartphones of the new model. The release was delayed until 2017 due to financial and technical reasons.

China Baoli, earlier known as Rex Global Entertainment, bought 30% in Yota Devices in 2015 from fund Telconet of Sergei Adonyev and Albert Avdolyan. The fund now owns 34.9% of Yota Devices, while Rostec controls 25.1% and 10% belong to the company’s management.

Along with the stake, China Baoli obtained an exclusive right to sell the YotaÐhone in China for seven years, and the Chinese company pledged to pay a debt to Telconet.

In 2016, China Baoli set up a joint venture with big Chinese smartphone maker Coolpad, where it will own 51% to design, distribute and sell a dual-screen mobile device in China.

China Baoli’s Vice President Theo Ede told Vedomosti that the venture will manufacture the YotaPhone 3, which will be produced in August–September.

Vlad Martynov, former general director of Yota Devices and now head of the Chinese unit of China Baoli Technologies Service Ltd., said the YotaPhone 3 was fully designed and ready for production, but manufacturing requires financing.

With the management team, Martynov is ready to find a new investor to finance production, if the decision is approved by the board of directors. A new shareholder could help the device to be sold not only in China, but in other countries as well, he said.

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