Solana Labs builds crypto apps that scale on a blockchain. It’s decided to also build a mobile phone for web3. The blockchain company is moving into hardware. There have been few times I’ve seen this work.
This story is something for all electronics OEM equipment manufacturers to follow. The mobile device planned is a modified OSOM handset with crypto wallet functions utilizing the ‘Solana Mobile Stack’ (SMS) software development kit and will be available early 2023. Cost is estimated at $1,000.
Marrying software and hardware never goes as planned, especially if one is not a core competence and the company has key vacancies w extended contract electronics finance and understanding.
Additionally, market and/or technology are often times key barriers to profitability. Companies moving into ‘new’ markets lose value in most M&A deals. Same goes for M&A deals when companies move into new technologies.
I’m familiar with diligence: discovery vs disclosure, to assess EMS manufacturing value. Proprietary framework aside, I respect Solana’s team’s ambition and have a sense they can probably pull this off – white label ODM or EMS.
Meanwhile, when a company moves into a new technology, and a new market, simultaneously, chances of success for that venture drop considerably. You can see how this plays out when companies enter a new market AND new technology in this M&A matrix image here.
The big question will be total landed cost for the phone.
Chances are also high CM partner receiving storage costs, WIP and warehousing and FGI costs, plus vendor liability, will be thin while ODM/EMS reaps windfall, sans materials purchase price variance (PPV).
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