Cyanogen declares war on tech giants
Startup’s mobile operating system proves popular in emerging markets
If Kirt McMaster’s vision unfolds to plan, his startup will be staring at a huge reward: a market he estimates is worth as much as $ 100 billion.
Getting there, however, involves competing against — and ideally beating — two giants: Apple and Google. As McMaster told Forbes earlier this year: “We’re putting a bullet through Google’s head.”
McMaster, co- founder and chief executive of Palo Alto, Calif.- based Cyanogen Inc., grew up in Cape Breton, N. S., and moved to California nearly 20 years ago.
The company’s mobile operating system, while built on Android, sells itself as providing better speed, improved battery life, enhanced security and the ability to personalize more features — a “souped- up version of Android,” available outside of Google’s control, is how some have described it.
McMaster calls Cyanogen the alternative to the dominant operating systems — Android and Apple’s iOS.
“We think there’s an option to create an open computing platform that enables new kinds of experiences to rise,” he said.
“There are a lot of things I wish I could do with my mobile device that you can’t do in the ecosystems that are ruled by the dominant players. We want to change that.”
Forbes called McMaster’s goal “one of the most daring plots in Silicon Valley history.”
The Cyanogen operating system is being sold in emerging markets on devices made by Indian consumer electronics company Micromax ( under the YU banner), Smartfren in Indonesia and OnePlus in China, a device that technology blog Gizmodo called, an “unbelievably fantastic smartphone.”
Cyanogen also has a partnership with chipmaker Qualcomm, and more partnerships with smartphone makers in North America and Europe are expected in the coming months.
“By the second quarter of next year, Cyanogen will have shipped devices all over the world,” McMaster said.
Cyanogen has more than 100 million users, but McMaster is aiming far higher. “We believe that within four to five years we can capture about 25 per cent of global Android volume.
“( By) that time Android is going to be around five billion- plus users. Cyanogen could be on upward of half a billion devices by that time.”
It’s a bold prediction and a difficult mission. Yet, Cyanogen has some significant ammunition at its disposal.
For one, it has a good supply of cash, having raised a total of $ 115 million, including a recent round of $ 85 million that valued the company near $ 1 billion. Cyanogen’s investor list includes Twitter, Qualcomm, Rupert Murdoch and VC firms such as Benchmark, Andreessen Horowitz, and Redpoint Ventures.
“There’s no question Cyanogen will be raising a lot more money in the future,” McMaster said. “We have a lot of money in the bank but at the end of the day we’re a fastgrowing company and the Android market opportunity is significant and sizable.
“If we can emerge as the secondor third- dominant mobile computing platform on Earth, it’s in excess of a $ 50- billion to $ 100- billion market opportunity, so there’s no shortage of interest to help fund the expansion.”
However, Cyanogen is not without its challenges. First among them is the need to grow its engineering ranks. It takes time to tweak the technology to work smoothly on each brand of phone, McMaster said, adding the company cannot keep up with the demand from device makers.
“Obviously as a startup — and Cyanogen is still very much a startup — we have to focus on what matters,” he said. “But there’s huge demand to get on multiple devices around the world, so that requires us figuring out how to scale engineering on the global platform.”
Cyanogen has an engineering team in Lisbon and is planning to open offices in China and India. In July, McMaster added two senior engineering executives. Stephen Lawler, a former Amazon vicepresident, is now senior vice- president of engineering; Karthick Iyer, who is vice- president of global systems, previously worked at Qualcomm, including as vice- president of engineering.
The Cyanogen operating system is now shipped exclusively on smartphones, but McMaster predicts a move toward devices as varied as watches and cars. “Right now we’re focused on smartphones. That’s where the game is. That’s where all the growth is — going from a billion- plus Android devices to well over five billion in five years. It’s an enormous market.”
Julie Ask, Forrester Research’s principal analyst, said the size of the future market will attract plenty of competitors, despite the massive risk involved.
Among the challenges she sees are convincing hardware manufacturers to adopt a platform with few apps, and, on the other side, convincing app developers to make apps for a platform with fewer consumers.
However, there’s huge demand in China and India for “lower tier” devices, she said. For instance, China’s Xiaomi has nabbed a slew of users with its customizable phones.
And more will try to follow. “Lots of small companies are going to take this shot,” Ask said. “( The) likelihood of failure is high, but they need to take those shots — the stakes are high if they make it.”
McMaster is confident in Cyanogen’s ability to beat out its competitors, and perhaps the big incumbents. “We’re really the only other guys that are a viable alternative with significant scale and significant traction in the market,” he said.
“We can be a very large, durable computing company that’s very, very important,” he added. “I think we can have well over 500 million users within five years. I think that we will be powering smartphones and other smart devices around the world.”