China to Develop its Own Smartphones to Maintain Security

China is pursuing to manufacture its own safe smartphones, in an effort to protect its handsets from U.S. surveillance. The effort includes both state-owned companies and some of the country’s savvier technology firms and marks the recent step in Beijing’s mission to shape a homegrown tech industry that nicks out U.S. suppliers. China is encouraging the effort, incited by revelations in 2013 from former U.S. National Security Agency worker Edward Snowden that the NSA had positioned investigation “back doors” in some American gear sold overseas.

Officials in China have long abraded at U.S. companies’ supremacy in smartphone operating systems and processors the parts of a cell phone most susceptible to hacking. In China, the world’s leading smartphone market, nearly all handsets are either Apple Inc. iPhones or are powered by Google’s Android operating system.

China to Develop its Own Smartphones to Maintain Security

Alibaba Group Holding Ltd., Chinese e-commerce company has merged with China’s Ministry of Public Security to develop a mobile operating system for police officers.

A spokesman said that Chinese smartphone manufacturer ZTE Corp. is working on a secure smartphone for government agencies using an operating system developed in-house, and a processor chip from a Chinese supplier to curtail security risks.

The trend is improbable to have much influence on the market share in China of U.S. mobile components and software. Analyst James Yan of market-research firm IDC estimates secure phones might make up 3% of China’s smartphone sales next year, or about two million units. But if more made-in-China operating systems and processors invade consumer cellphones, that could possibly be a challenge for Google’s Android as well as for Qualcomm.

Cisco Systems Inc. have documented sales declines, as government agencies and state-owned enterprises buy more from domestic counterparts such as Chinese server maker Inspur Group Co. and telecommunications-gear provider Huawei Technologies Co.

Chinese banks have started to buy more local brands of smartphones, though official shares were suspended earlier this year because of U.S. pressure. A spokesman for ZTE said it isn’t probable to use completely Chinese-made hardware and software in a smartphone, but to meet the requirements of government agencies it is trying to use local suppliers as much as possible.

“Right now the security sector is very hot.”

Said Chris DeAngelis, Beijing-based general manager at consultancy Alliance Development Group.

“The government is looking for nonforeign technologies as much as possible to prevent various back doors.”

Leo Li, chief executive of Spreadtrum, told that his company will start sales this year of special chipsets that will permit phone users change between Android and an encrypted operating system made by Chinese company Yuanxin Technology Co.

“Your voice is encrypted. Your data is encrypted. It is very secure.”

Leo Li said.

Bryce Boland, Asia chief technology officer for network-security company FireEye Inc revealed that a hacker could still get data directly from a telecom operator

Lao Yao, secretary-general of the China Smartphone Alliance, also said that certain Western governments work with BlackBerry Ltd. of Canada to custom-make high-security phones for their executives, but China and Western companies don’t trust this to be an option.

“China has no choice but to develop its own operating system to maintain security.”

Lao Yao said.

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