Smartphone’s and Blockchain Converge, Will Users Follow?
Shintia Dini Wilanda
RESEARCH AUTHOR
Published on
October 28, 2018

In the race to develop products that will integrate blockchain technology into people’s everyday lives, two companies have stepped forward — HTC and PundiX.

HTC, the Taiwan based smartphone creator, is leveraging blockchain technology with their new Exodus 1 phone to bring greater privacy and security for users’ data, a major issue in today’s current privacy climate. Instead of saving user data on the cloud where it is more susceptible to loss and manipulation, the Exodus 1 uses blockchain encryption to protect against such attacks. The HTC Exodus is the first smartphone by a major brand to use blockchain technology and function independent of the need for a centralized mobile carrier. It will support decentralized applications or DApps, a digital wallet for storing your cryptocurrencies, and runs on the Android operating system.

In an interview with TechRadar Pro, Phil Chen, the brain behind the Exodus, says users storage wallets will be secure even if they have misplaced their phones. “One of the most critical things within crypto is architecting security within the phone…security was never built into the original internet,” Chen says. He goes on to discuss the importance of users owning their data saying that “In the Information Age, there needs to be a definition of digital property . . . if this digital property is not defined…I would be very scared of what the next generation of the internet can become.” The phone can only be purchased using Bitcoin (BTC) and Ethereum (ETH) at a fixed price of 0.15 BTC and 4.78 ETH respectively (roughly $1,000 as of today).

HTC has struggled in the past six years watching Apple, Samsung and other competitors like OPPO, Xiaomi and Huawei in China dilute its market share (See Figure 1). By 2015, HTC began experiencing net losses. In 2017, HTC sold about half of its research and design team to Google for $1.1 billion. According to Bloomberg, HTC was considering “a full sale of the company” one year ago.

All of that may change as HTC focuses on integrating innovations, like blockchain technology, to its consumer products. The announcement of the Exodus 1 in May and its release a few days ago is yet to impact its share prices (See Figure 2).

Unlike HTC, PundiX is a blockchain specific company that has been developing Point of Sale (POS) solutions, including hardware and software, for retailers this past year. Mass production of POS hardware began in February 2018 and according to PundiX’s site they “will deploy over 100,000 Pundi XPOS devices in more than 12 countries”.

On October 9th at the XBlockchain Summit in Indonesia, PundiX revealed the XPhone a smartphone that also uses blockchain technology so that the phone can operate independently of a centralized mobile carrier. Like the Exodus 1, the Phone can run DApps and have its storage wallet for crypto assets. The XPhone runs on PundiX’s blockchain ecosystem called the Function X. It is also backward compatible with Android OS 9.0 through PundiX’s F(X) OS.

A demo of the phone can be seen here. What is unique about the XPhone, according to their announcement on Medium, is that every phone “will be a node and each will have its own address and private key, uniquely linked to their node names, not unlike traditional URL and IP addresses.”

Looking at the price of PundiX before and after the XPhone announcement starting at an October 8th high of $0.001560 to an October 10th high of $0.001697 the PundiX token experienced a roughly 9% increase (Figure 3). With an all-time high of $0.001859 on October 21st, the price presently remains in the $0.001600 range. After a month of minimal price changes in September, it appears the hype around the release of the XPhone has impacted the value of PundiX tokens. The XPhone will be released in Q2 2019, and its price tag is currently unknown.

It is exciting to see companies bring blockchain to the mainstream. Having hardware and software with real use cases helps better bring user adoption of this new technology. Time will tell whether users will purchase these phones, but at a price tag of $1000, it seems unlikely. Hopefully, as more products enter the market, competition will drive down costs.

                                                        

Sources

  1. https://www.techradar.com/news/htc-exodus-the-blockchain-phone-that-could-change-the-internet-as-we-know-it
  2. https://medium.com/pundix/making-the-worlds-first-blockchain-phone-call-66784b5436ee
  3. https://www.bloomberg.com/news/articles/2017-08-24/smartphone-maker-htc-is-said-to-explore-strategic-options
  4. https://www.statista.com/statistics/271496/global-market-share-held-by-smartphone-vendors-since-4th-quarter-2009/
  5. https://www.bloomberg.com/quote/2498:TT
  6. https://www.newsbtc.com/2018/10/23/htcs-new-blockchain-phone-can-only-be-bought-with-crypto/
  7. https://coinmarketcap.com/currencies/pundi-x/


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