Lim Yan Liang – Straits Times Indonesia
Controversial tech company Fusion Garage, once touted as an exciting local start-up, has bitten the dust.
The company that beat Apple to the market with a tablet device back in 2010 published notices in newspapers in Singapore on Tuesday, stating that it would be closing down as it could not pay its creditors.
A search with the Accounting and Corporate Regulatory Authority revealed that the business is in liquidation, under a creditors’ voluntary winding-up.
This means that accountants have been appointed and, in the likely scenario that they find the company insolvent, its assets will be sold to pay off its debts.
The advertisements came on the back of reports three weeks ago that Fusion Garage’s public relations (PR) firm and its legal representative – both based in the United States – had quit.
The PR firm, McGrath Power, had said earlier that Fusion Garage had been uncommunicative for weeks, while the law firm, Quinn Emanuel, said its fees had not been paid for several months.
Fusion Garage had earlier stopped selling its flagship product, the Grid10 tablet, on its website.
The company has been embroiled in a lawsuit with its former partner, US-based tech blogger Michael Arrington, since December 2009.
Repeated attempts to reach its chief executive officer and co-founder Chandrasekar Rathakrishnan for comment were unsuccessful.
While it is unclear how much its creditors are owed, prominent shareholders in the firm include Ernst & Young partner Choo Eng Chuan and The Hour Glass executive chairman Henry Tay Yun Chwan.
Last month, Rathakrishnan told The Business Times that the firm had put itself and its intellectual property on sale in an effort to stay afloat, as investors were reluctant to inject more capital.
Analysts The Straits Times spoke to said cut-throat competition and razor-thin margins meant Fusion Garage’s demise was not unexpected.
In the initial days following the iPad’s successful launch in April 2010, a long list of players tried entering the market because everyone thought tablets were going to be the next big thing, said Melissa Chau, research manager for client devices at IDC Asia Pacific, a research and analysis firm.
“They threw everything at the wall in the hopes that something would stick, but it’s not that easy,” she said. “Other than Apple, few companies could gain traction in the market.”
Privately held Fusion Garage, which has $12 million in paid-up capital and an investment of tens of millions of dollars from Malaysian mobile device maker CSL and other private investors, tried to carve out a niche for its second-generation Grid10 tablet by heavily modifying Google’s Android operating system into a tile-based system, besides creating its own hardware.
But like its JooJoo tablet – which was launched in March 2010, a week before the first iPad – the Grid10 faced multiple delays and negative reviews in the tech press.
Unlike the JooJoo, which survived in the market for nearly eight months before it was pulled, the Grid10 was never launched in Singapore.
It was launched solely in the US.
“For such a new technology, you need to prove to consumers that you have a very compelling case, as tablets lack the portability and immediacy of the smartphone and the smooth experience and large screen of the PC,” said Chau. “I haven’t really seen any of these other guys prove themselves.”
Fusion Garage is not the first start-up Rathakrishnan has co-founded: He had earlier launched mobile software developer Radix, which folded in 2007.
Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.