Cyanogen - Android OS - wireless startups - Fierce 15 2015

Fierce 15

Where it's based: Palo Alto, Calif.
When it was founded: 2013
Website: www.cyngn.com

Why it's Fierce: Cyanogen's operating system for smartphones is basically Android without the Google, with some security, customization and performance improvements thrown in. That's both the company's biggest selling point as well as its biggest obstacle.

But that's not stopping Cyanogen from setting lofty goals: "We want to be that third leading mobile operating system" behind Android and iOS, said Vivian Lee, the company's vice president of marketing. She added: Cyanogen is "a better, faster version of Android."

Cyanogen, which today counts around 90 employees, traces its roots to 2009, when Steve Kondik began tinkering with Google's first versions of Android. Android was and remains an open source OS, which means that anyone can grab the platform's source code and do with it what they wish. Between 2009 and 2012, Kondik worked to build an alternative version of Android, one that offered more features and options--including the ability to ditch Google's services from the platform entirely.

It was in 2012 that Kirt McMaster approached Kondik about turning his hobby--playing with Android--into an actual company. McMaster had a clear vision for what Cyanogen is now working to become, and his approach is based on his longtime experience in the wireless industry. He was the co-founder of Boost Mobile, now owned by Sprint, and he also spent time at Sony and Sega defining their respective mobile strategies.

In turning Cyanogen into a business venture, McMaster sought to tap into several clear trends in the smartphone industry: Specifically, Google's control over many of the services that run on top of Android, as well as the razor-thin profit margins that most Android smartphone makers suffer from. The result is an OS that can run any app designed for Android but that can be tweaked to any manufacturer's liking. Importantly, Cyanogen offers wireless carriers, smartphone manufacturers and third-party app developers the ability to deeply integrate their services into the Cyanogen OS--and to share in any resulting app installs or sale of software and services to users.

"We're opening up Android," Cyanogen's Lee explained. "This is something that Google won't do because this will impact their business model." Lee acknowledged that Android is an open source platform, but noted that Google retains tight control over the Android user interface among manufacturers that agree to Google's terms of service because Google derives advertising revenues from the use of its Android services, like GMail, Maps and Internet searching.

To highlight the differences between Cyanogen's approach and Google's, Lee pointed to Cyanogen's work with Truecaller, which provides an advanced caller ID service. Lee said that Cyanogen users can install the Truecaller service directly into their phone's dialer--something she said no other major smartphone OS can offer.

But what really pushed Cyanogen into the forefront of the smartphone industry was the company's massive $80 million round of fundraising earlier this year, as well as the companies that participated in that round. Media mogul Rupert Murdoch, Qualcomm, Twitter Ventures, Telefónica Ventures, Index Ventures, Access Industries and others participated in the round, raising Cyanogen's total venture capital war chest to $110 million.

Already, Cyanogen has some serious momentum to show for its work. Qualcomm has agreed to support the company's OS in its chipset reference design, and international smartphone maker Micromax is pushing ahead with its Yu brand for Cyanogen-powered phones. (Though Cyanogen did lose OnePlus as a partner this year since OnePlus is, ironically, pursuing its own version of Android.)

What's next: Lee said that Cyanogen is working to expand globally and update its SDK. "We have a number of commercial deals in place that have yet to be announced," she said, explaining that the company expects Cyanogen-powered devices to be in every major market in the world by the end of this year.

And what of the United States? "You will see something in the near future," Lee said, without providing specifics. "We definitely have plans to launch devices in the U.S."

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Cyanogen - Android OS - wireless startups - Fierce 15 2015