Foxconn Technology Group grew into the world’s largest electronics manufacturer for hire by churning out best-selling products such as iPhones, Kindles and PlayStations. Now, it’s deploying that power to bring cryptocurrencies to the masses.
A subsidiary of Foxconn has agreed to help develop and produce a blockchain phone from Sirin Labs, according to the startup. The new device, called the Finney, is designed to help owners securely store and use digital coins such as Bitcoin, as well as related services.
While millions of people have bought Bitcoins, relatively few bother to use them for daily transactions. To prevent theft, owners have to keep the coins on special memory sticks until needed, then remember user names and passwords that can be dozens of characters long.
With the current user experience, “the mass market would never get it,” Sirin Chief Executive Officer Moshe Hogeg said in an interview. “There’s no chance my mom can figure out how to use Bitcoin, and my mom is smart.”
Sirin raised $158 million in December for the project in an initial coin offering, in addition to $70 million raised previously. The phone is slated to ship in October. Sirin plans to sell the device through eight new stores, located in places with the most active crypto communities, such as Vietnam and Turkey. Hogeg said he hopes it will eventually be sold through mobile carriers as well. So far, more than 25,000 units have been preordered, the company said. Sirin aims to ship from 100,000 to a few million units this year.
The device seeks to integrate all kinds of tokens. It will let owners shop on crypto friendly sites like Overstock.com and Expedia, converting cash into specialized tokens if needed. Users may also activate their phone’s Wi-Fi while commuting and get paid in tokens by fellow bus riders looking for access to a wireless network.
Sirin said the Finney will handle all coin-related services in a part of the phone that’s activated with a physical switch. Instead of keying in a complex address and private key, Sirin said users may eventually verify their identities with an iris scan, a fingerprint and a simple password.
While the phone’s architecture seems secure, there’s a risk that thieves could kidnap Finney owners and access wallets by force, said Matt Suiche, founder of security provider Comae Technologies.
“It looked like the phone design was designed to stand out visually — to make it more appealing to the public from a sales point of view,” Suiche said in an email. “But it always makes it easier to identify targets.”
Switzerland-based Sirin hopes to license its technology to other phone manufacturers. Such software deals could push down the price from Finney’s $1,000 to as little as $200.
“I think I can take it to a mass market phone in a world where innovation in phones is saturated, it’s dead,” Hogeg said. He said he expected deals with two smaller manufacturers, and is in conversations with a top supplier. Sirin is in talks with Huawei Technologies Ltd., Bloomberg has reported. Foxconn declined to comment.
“In order for the user base to truly grow, solutions need to be compatible with existing hardware and focus on a broad spectrum of users,” Lucas Nuzzi, an analyst at Digital Asset Research, said in an email.
Sirin is hoping to get to the mass market before competitors like Zippie and BitVault. Zippie, which raised $30 million in an initial coin offering in February, was created by a 10-person team with experience at Nokia and Jolla, a mobile operating-system company. The startup also will license its software to hardware manufacturers, said founder Antti Saarnio. BitVault has already shipped some units for evaluation in military applications in Asia, and is considering eventually shipping its blockchain phone directly to consumers, said Hein Marais, CEO of maker Embedded Downloads.
Whether Sirin can turn this product into a blockbuster remains to be seen. Some of Hogeg’s previous ventures didn’t go far. What’s more, most people don’t yet use cryptocurrency or blockchain. Only 8 percent of Americans has invested in digital tokens, according to Finder.com.
And the phone market is difficult. But Hogeg is undaunted.
“I want to do something that’s better than the current user experience,” he said. “In the end when you look at the Chinese wall, it started with one guy taking one small brick and putting it into place. And then another one and then another one. We can do it step by step.”