Security concerns boost local phone sales

Civil servants turn to domestic brands for encryption services

Chinese government officials are switching to domestic smartphones with encrypted communications in the wake of security concerns surrounding foreign produced devices like Apple iPhones.

Sales of local smartphone brands with encryption features have increased since last month, when Apple was revealed to have intentionally installed security backdoors in some 600 million iOS devices that offer surveillance-level access to data including photos, browsing history and GPS locations.

This has sparked fear among Chinese smartphone users, especially those who work in the government, where security is their top concern.

A mobile industry insider said there has been an increase in the amount of encrypted smartphone orders civil servants have placed to local phone companies since last month.

"About 500 to 1,000 [such] phones are purchased from Shenzhen to be sent to Shanghai in a single order every time Shanghai is out of stock," the insider told the Shanghai Morning Post.

A Shanghai government official admitted to the Post he switched to a domestically produced encrypted phone because of his need for higher security protection.

"I often get access to internal documents and sensitive economic data at work," said the official.

"If my phone is tapped or the data is leaked through security backdoors, it may lead to a leakage of information about government policies," the official added.

Apple is not the only mobile phone company losing public interest. Samsung's China smartphone sales decreased to 13.2 million units from 15.5 million a year earlier during the April-June period.

Local brands have benefited from the decline. Xiaomi became China's top-selling smartphone brand in the second quarter this year, selling 15 million smartphones in China, surpassing foreign mobile giants like Samsung and Apple, according to market research company Canalys.

Coolpad has recently launched the first batch of 4G smartphones that come with encryption approved by the government.

"Our main customers are corporate leaders and government officials," a spokesman for Coolpad told the Global Times.

The spokesman said around 40,000 encrypted smartphones were purchased by Shanghai police officers on duty during the 2012 Shanghai World Expo. Hunan police and the Aviation Industry Corporation of China are also using smartphones with an encryption service.

A civil servant who works in a department of the Shanghai municipal government told the Global Times that all staff members in his department switched to domestic encrypted phones three years ago.

Wang Yanhui, secretary-general of the Mobile China Alliance, said the trend implies a crisis of confidence towards foreign brands.

"The technology and operating systems used by domestic and foreign phones are very similar, but what puts the foreign brands at a disadvantage is a lack of trust by the government," Wang told the Global Times. "Domestic phone companies are stronger in terms of understanding and catering to the Chinese government's need in terms of security."