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Blackphone 2 Privacy-Centric Smartphone Having Sales Challenges

Silent Circle, the company that offers the Blackphone, bet big that buyers would want a privacy-ready phone that sells for an iPhone-like price.  

Blackphone 2, Silent Circle, smartphones, privacy, privacy-enabled smartphones, iPhones, Samsung Galaxy S7, security

The maker of the privacy-focused Blackphone 2 smartphone, Silent Circle, is apparently having money troubles because sales of its $799 device aren't close to meeting expectations.

The company laid off about 20 employees since the beginning of the year, which is about 15 percent of its workforce, and is being sued for more than $5 million it allegedly owes to a Spanish company that helped build the original Blackphone, according to a July 6 story by Forbes.

The problem, according to Forbes, is that while users may have said in surveys and interviews that they want smartphones with great privacy features, in the real world consumers and enterprise users may actually want flagship phones from Samsung and Apple that include great cameras, great performance and other flashy features.

That actually doesn't shock me one bit. It's one thing to say you like something and it's another to actually plunk down your own hard-earned cash to buy it.

At $799, the latest Blackphone 2 handset sells for about the same money as an iPhone 6s Plus or a Samsung Galaxy S7 Edge. Those phones are selling by the truckload, while Blackphone 2 handsets are way behind expectations, with revenue "hundreds of millions of dollars below forecasts," the story reported.

The Blackphone 2 went on sale in September 2015, almost seven months after its March introduction at Mobile World Congress as a successor to the original Blackphone, according to an earlier eWEEK story. It runs on the company's Enterprise Privacy Platform (EPP), a cloud-based combination of software, services and devices that enable a deeper level of privacy than other devices. The handsets protect users by providing full device encryption by default using Silent Circle's Silent OS operating system and Android technologies.

The smartphone features a 5.5-inch Full HD display that's covered with protective Corning Gorilla Glass, a Qualcomm Snapdragon octa-core processor, 3GB of RAM, 32GB of internal storage and a microSD card slot that supports storage cards up to 128GB. It also has a 13-megapixel rear-facing camera, a 5MP front-facing camera, a 3,060mAh battery with quick charging, and worldwide LTE and 3G/HSPA+ connectivity.

The enterprise-ready handsets include the ability to separate a user's personal and work calling, texting, social media activities and other functions into separate spaces on the device. They use a built-in security center that enables the user to easily manage their privacy and security settings in one place, giving them control of individual app permissions and the data on the devices. Also included is a remote wipe setting that can be activated if the phone is lost or stolen.

And while that's all good, maybe competing devices from Apple and Samsung and others offer good-enough privacy and security with more style and flexibility compared with the Blackphone.

If Silent Circle wants to turn this around, it had better find a way to make its phones must-have devices for many users. Whether that can be done against fancy cameras and more in iPhones and Galaxy smartphones is still to be seen.