Android and iPhones are all about privacy now, but startup OSOM thinks it can do better – CNET

It all started with two trips to China. The first, in August 2019, brought Jason Keats to Hong Kong just as protesters took over the airport. The head of R&D for the once-buzzy startup Essential Products was there to work on the company’s upcoming Project Gem, an eye-catching new smartphone with an unusual, skinny design. The second was in January. Keats was back in China, finishing up Project Gem — a project ultimately doomed by Essential’s controversy-plagued founder. 

While Essential is no household name, its founder, Andy Rubin, is revered by smartphone aficionados as “the father of Android.” His reputation drove the quick rise of the startup, but the poor response to its debut handset, the Essential Phone PH-1, and the outcry over Rubin’s sexual misconduct allegations sparked its similarly rapid demise. 

But for Keats, his work on Project Gem and those trips to China on behalf of Essential proved to be a critical catalyst for something else. His first trip gave Keats a taste for the need for privacy on devices, as a colleague faced interrogations about what was on his phone when they passed from Hong Kong into mainland China. The second showed Keats that while Essential was over, his ambitions to produce a high-end device were not. And so his next endeavor, OSOM, was born. This time, it was all going to be about privacy. 

“Essential had 80% of a great idea,” Keats says in one of three Zoom video interviews with CNET over the past month. “But we needed to come up with what really brought that last 20% — a focus on something. …. We’re focused on a singular vision in terms of what all our products are going to be, and we are bringing a whole suite of products to market.”

Keats has brought some of the Essential team over to OSOM. Notably, that doesn’t include Rubin. 

“Essential’s our past,” Keats said. “OSOM’s our future. Andy’s not involved in any capacity.” 

OSOM, which stands for Out of Sight, Out of Mind, isn’t trying to re-create Essential or release the devices the former company never finished. In fact, it isn’t ready to talk about what specific products it plans to build. But it does have a very clear mission: giving us more control over our data. It plans to do that through a combination of hardware and software, with more than half a dozen products arriving over the next several years. 

“Everything we’re doing is built around privacy,” says Keats, who along with founding OSOM serves as its CEO. “It’s really about giving people a choice. Right now there’s no choice on who private information is shared with and how. … We want consumers to own their privacy, own their data.”

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OSOM’s privacy focus comes amid heightened awareness about what tech companies know about us. Giants like Google and Facebook have so much data from our likes and search history that the sites can be used to manipulate our emotions. Companies collect information on everything from our income to who we message on our devices, so that they can sell targeted ads. Sometimes they share that data with the police, like during the Black Lives Matter protests that swept the US earlier this year. And sometimes sites track us even if we tell them not to, down to the level of recording our mouse movements, a study by the journalism nonprofit The MarkUp found. 

“The reason ads are accurate is they’re good at inferring your preferences,” says Serge Egelman, a privacy expert who studies how phones access user information at the International Computer Science Institute. “Companies collect seemingly benign data that allow them to very accurately predict your interests.”

When it comes to phones, there are two main privacy concerns. The first is what data your operating system or device maker collects on you. The second is what information the third-party apps you download are extracting and sharing, whether the OS outright allows it or not. The latter is difficult to track. Apps can be dishonest about the data they collect, and it takes analysis of the traffic leaving your phone to understand what an app is truly doing. 

The European Union and California have laws that allow consumers to opt out of having their data sold. But many times, companies are collecting information on you without ever letting you know — let alone giving you control over where that data goes. 

OSOM wants to change that. Its plan seems straightforward: It won’t ever have access to that data to start with. And when you want to share your data, it will make sure you know where it’s actually going. Neither task will be easy. 

“All these companies are telling you, ‘Don’t worry about your privacy, your privacy’s safe with us,'” Keats says. “But there are so many examples of privacy not being respected or being monetized or being sold or being stolen in some unfortunate scenarios. … There will never … [be] a scenario where we have an individual’s data.”

Essential’s implosion 

Five years ago, the mobile industry was dominated by two companies: Apple and Samsung. The vast majority of people seeking out a new smartphone in the US chose an iPhone or a Galaxy S device. But that didn’t mean other companies didn’t try to compete. A newcomer to the mobile world was Essential Products, a mobile hardware startup founded by Rubin. Rubin created Android in 2003 before it was acquired by Google in 2005 and went on to power about 85% of the smartphones sold around the globe. 

Essential’s aim was to introduce a sleek device to compete with Apple and Samsung, and it had a lot of buzz from the beginning, largely thanks to Rubin. The company introduced its first Essential Phone PH-1 in August 2017 to much fanfare. It flopped. CNET’s review called the $700 device “unfinished” and “rushed” and said it had “serious flaws that [kept] it from fulfilling its promise to die-hard Android enthusiasts.” Essential wanted to make a high-end phone but didn’t have enough truly high-end specs — like a good camera — to woo buyers. It also didn’t offer anything dramatically different from all the other phones on the market. 

“There have been companies that tried something different and came at it trying to solve a pain point,” Creative Strategies analyst Carolina Milanesi says. “I don’t think Essential did.”

Essential slashed the price of its phone to $500 two months after launch and canceled its second phone. It reportedly put the company up for sale in May 2018, only a year after the company introduced itself to the public.

Essential was in trouble. But an even bigger problem soon emerged: Rubin himself. In late 2017, a report said that Rubin had left Google three years earlier after an internal investigation found he’d had an inappropriate relationship with a subordinate employee. Rubin took a short leave of absence from Essential but at the time said any relationship he had while at Google was consensual.

A year later, in October 2018, the New York Times reported that Rubin had resigned from Google after an investigation into whether he coerced an employee into oral sex in 2013. The search giant reportedly gave him a $90 million exit package and kept quiet about the accusations. Rubin denied the claims. The report spurred a worldwide protest walkout at Google in November 2018.

Rubin’s alleged misconduct also impacted Essential’s reputation and its effort to introduce the Project Gem smartphone. Rubin teased the thin, long, colorful device on Twitter a year after the New York Times report, but he faced harsh criticism about his perceived attempts at a comeback. The glass unibody phone never made it to market, neither did any other products Essential developed, including a possible smart speaker. Essential, once valued at $1 billion, shut down in February.

The first Essential Phone “did have some shortcomings, particularly from a software perspective” and the camera, Keats said. And the company released the phone before it was really finished — something OSOM plans to avoid. 

“We’re not going to push something out before it’s ready,” Keats says. “That’s really what happened with the Essential Phone.”

The OSOM bench

Keats, who calls himself “the first hire and second employee to start at Essential,” set out building something new with several former Essential employees — but without Rubin. 

Keats has a long history in Silicon Valley. Before serving as head of R&D at Essential, he worked at Apple, helping build the MacBook Air and serving as head of product architecture for the iPad Pro. He also worked with Jony Ive on the Leica M camera, which sold for $2 million at auction. Keats also worked on Apple CarPlay and Apple Maps, engineering hardware that collected mapping data. 

When starting OSOM, Keats recruited several former colleagues from Essential. “The hardest thing to do in any company, no matter what you do, is put together a team,” Keats says. “So I chatted with the team. ‘Do you want to let this go or do something with me?'”

So far, he’s had seven takers. Only one of OSOM’s nine full-time employees didn’t previously work at Essential. OSOM aims to have 50 employees by the end of 2021, Keats says. 

“When we knew it was the end [of Essential], Jason and I were sitting in the cafeteria, and he was like, ‘Dude, what are we going to do? There’s just so much left,'” Wolfgang Muller, OSOM’s co-founder and head of marketing, says in a Zoom interview with CNET. He previously served as vice president of sales at Essential and at HTC before that. 

“We said, if we’re going to try to bring out another commoditized product to the market, we’ll fail,” he says. “When we bring something out, it has to make a difference.”

Other members of the OSOM lineup include Jean-Baptiste Theou and Dave Evans. Now OSOM’s head of software system architecture, Theou served as principal systems architect at Essential, overseeing tasks like security updates. Evans, a former designer at Essential and Samsung, holds that same role at OSOM. And Wilson Chan, a former operations expert at Essential and director of manufacturing at Foxconn, works as OSOM’s head of operations.

Notably, OSOM doesn’t yet have any privacy or cybersecurity experts on staff. The company has an advisory panel to fill that need for now, Keats says, but it’s planning to hire such experts as soon as the company receives new funding. 

OSOM has secured $5.6 million in funding from angel investors and is currently raising its Series A round.

Privacy first

OSOM wants to become “the No. 1 tech brand associated with privacy in the world. Period,” Muller says. But that doesn’t mean its products will be super secure or claim to be unhackable. Instead, OSOM plans to give users more control over their data, including having say over what’s shared with third-party apps.

It isn’t ready to detail exactly how it will do that — and that is a big question. But part of its strategy involves removing itself from the equation. Data will be stored on a user’s device, unless they allow it to be shared elsewhere, and OSOM won’t be able to access it, Keats says. 

“Our whole treatise is to have no access to an individual’s data … unless they choose to share,” he says.

A user can decide if something like a camera or GPS is turned off, and OSOM’s software will ensure that it doesn’t turn itself back on. Or if someone wants to send a photo from OSOM’s new device, it could scrape the metadata to protect your location and other sensitive information. While some of these capabilities are found in other devices, OSOM’s pitch is it will make securing your device easy enough that anyone — from kids to your grandfather — can do it.

“If the user experience sucks, nobody’s going to use it,” Keats says. 

Users will still be able to access third-party apps and services that are built around sharing data, like Facebook, but Keats declined to say how things like voice assistants — which require a lot of data about a user — will work. Overall, OSOM plans to track what’s going on and present information to people about how their data is used in a really “absorbable way” that shows them what was shared and to whom it was shared.

“People have this general understanding that [a company like] Facebook monetizes their data, but they don’t have a clue how they actually do that or how it works,” Keats says. “We want to make that transparent [and help people] understand what is private versus un-private.”

OSOM’s goal to become synonymous with privacy may sound familiar. Apple has been positioning itself as the privacy-focused device maker for years. It’s plastered the airwaves — and billboards — with ads about its efforts to protect our data. The company has emphasized that it doesn’t make money from selling data about users like Google, Facebook and others do. Instead, Apple makes money from its devices and services. 

And next month, Apple’s new iOS privacy settings will show you what apps are tracking you, sort of like giving each service a nutrition label. You’ll see how much data an app requests before you download it. And you can take more control of location-sharing data and have better insight into when an app is using your microphone or camera. 

“For food, you have nutrition labels,” Erik Neuenschwander, Apple’s user privacy manager, said in June. “So we thought it would be great to have something similar for apps. We’re going to require each developer to self-report their practices.”

Some privacy experts aren’t sure giving users more insight into what data is shared about them is enough. And the nutrition-label data will be self-reported by the apps themselves.

“Telling the user they have control doesn’t solve the problem,” says Yuvraj Agarwal, a Carnegie Mellon associate professor of computer science who is an expert in smartphone privacy. “Can they even make these decisions properly?”

Keats doesn’t think Apple has taken its privacy focus far enough. While it may limit what third-party developers know, it still has a lot of knowledge about all of us, based on how we use our iPhones and other devices. OSOM doesn’t want to ever have that kind of data about its users. 

Not reinventing the wheel

While Keats won’t say OSOM is working on a phone, that’s likely what it’s making. He did say the company won’t try to reinvent the wheel. It will use standard operating systems like Android rather than trying to build something privacy-focused from the ground up. That’s a smart decision. Samsung, which is the world’s biggest phone maker, couldn’t get its Tizen software to take off in phones, despite the money and resources it threw at developers. 

Still, it won’t be easy to break into mobile. Long-standing companies like LG and Sony have sputtered, while other early smartphone giants like HTC have faded away. Chinese vendors like Huawei have struggled to make inroads in North America, and even Essential, with a huge name like Rubin behind it, couldn’t succeed in the market.

“A lot rode on Andy Rubin,” Creative Strategies’ Milanesi says. “The attention was there because people thought it was another Android moment that was going to redefine the industry. And that wasn’t the case.

And there are plenty of other companies who’ve created privacy-focused products that went nowhere. Six years ago, Silent Circle released the privacy-obsessed Blackphone and followed it up with the Blackphone 2 phone and the Blackphone + tablet. Nobody bought the devices, and Silent Circle now makes a privacy app for iPhones and Android phones.  

More recently, the e Foundation has created an open source, privacy-centric smartphone operating system called /e/, which it has embedded on Fairphones and refurbished Samsung Galaxy phones. It aims to provide a “deGoogled” version of Android. European mobile company Jolla offers its Linux-based Sailfish OS for companies and governments that want to maintain control over all of their data. Neither operating system alternative has a large user base. 

And social purpose company Purism, which launched in 2014 with the help of crowdfunding, has created its own privacy-focused, Linux-based OS called PureOS. The software runs on its $2,000 Librem 5 phone, which CNET sister site TechRepublic earlier this year called “not close to consumer ready” despite being in development since 2017.

“There probably is a niche market for some of those devices, but for most consumers, they just want a device that works,” says privacy expert Egelman. “The thing most people want is to be informed about what the apps on their devices are doing.”

At the same time, it could be tough to get consumers to trust an unknown, untested startup like OSOM, instead of an established giant like Apple. 

“The reality is that people are quite happy with Apple knowing what it knows,” Milanesi says. 

Keats maintains there’s room for a company like OSOM, especially if the privacy-centric products it releases also have drool-worthy specs. The company is working with the biggest components suppliers and manufacturers in the industry, he says, tapping into the connections and knowledge his team garnered from their previous employers. 

“We’re certainly not building a hyper secure, nobody’s-allowed-in ecosystem,” Keats says. ” We’re building something that allows the user to choose when they want to [share their data] and make informed decisions based on the information they get from our products.”

Premium products at mainstream prices

OSOM plans to release seven or eight products, a mix of software and hardware in different sectors, over the next three years. The magic, like what Apple offers, is the combination of the company’s hardware and software together. OSOM won’t offer its privacy software on its own, at least not at first. The company is targeting late 2021 for the first product launch. 

It expects to include premium hardware in its devices but price them at more accessible levels, a strategy followed by Chinese handset makers like OnePlus. For instance, if OSOM releases a phone, it wouldn’t cost as much as the $999 iPhone 12 Pro or $1,099 12 Pro Max but instead would be level with something like the $799 iPhone 12. 

“Our devices are targeted to be solidly in the middle of the accepted prices for whatever those products might be,” Keats says. “We’re not targeting our products to ultra premium users, but we are going to build premium products. We can make money doing that because of a couple other surprises up our sleeves that will be announced next year.” 

OSOM’s products will arrive in the US and Europe at the same time, as well as parts of Asia, Keats says. While Keats came up with the idea for OSOM while in China, the company won’t be targeting that market, at least not at first. “It’s a difficult market to get into,” he says, largely because of the government’s control over its citizens and how it would react to a privacy-centric phone. 

That’s ironic, given where his original inspiration came from. Keats recalled landing at the occupied Hong Kong airport last year, where he “saw firsthand how people were being treated around the world at protests.” 

“Everyone has something they want to keep private,” Keats says. “Our products really are built for everybody.”

CNET’s Laura Hautala contributed to this report.