It’s a little hard to take Kirt McMaster seriously at ﬁrst. He tends to run on his own schedule, and when he shows up 20 minutes late for a meeting on a recent weekday, there’s not so much as a mention of his tardiness, let alone an apology. In black jeans, a black hoodie that looks a half-size too small, brown Birkenstock sandals and a pair of fat black rings—one on his left thumb, one on his right pinkie—the 46-year-old looks more like a techno beach bum than an entrepreneur. He works out of a squat, grey, converted plumbing-supply store in Palo Alto, California, that doesn’t call attention to the fact that his startup, Cyanogen, is housed inside. The period sign on the façade says ‘John F Dahl Plumbing and Heating (since 1895)’. The wardrobe and the location are disguises, necessary when one is hatching one of the most daring plots in Silicon Valley history. But McMaster happily blows his cover minutes into our conversation, summing up his mission—preposterous as it sounds—in his booming baritone: “We’re putting a bullet through Google’s head.”
The time is ripe for someone to try. The mobile revolution kicked into gear by the iPhone is getting stagnant just as it’s reaching a new inﬂection point. The number of smartphones on the planet is expected to grow from about 2.5 billion to nearly six billion by 2020. Prices for fast and feature-rich mobiles are crashing, allowing new powerhouses like Xiaomi to emerge in record time. Yet Apple’s iOS and Google’s Android control 96 percent of the mobile operating system market. It’s their chess game, and we all get to choose between white and black. McMaster doesn’t so much want to insert himself between Apple and Google as to kick their chessboard over and deliver to the world a third option, Cyanogen, a six-year-old mobile operating system that’s essentially a souped-up version of Android and available outside of Google’s control.
McMaster, who revealed his plans in detail for the ﬁrst time in a series of interviews with Forbes, is amassing a war chest and powerful allies to go to battle. Cyanogen just raised $80 million from investors that include Twitter, mobile chip powerhouse Qualcomm, carrier Telefónica and media titan Rupert Murdoch. The round, which values Cyanogen at close to $1 billion, is being led by PremjiInvest, the investment arm of Wipro’s billionaire founder, Azim Premji, India’s third-richest man. Earlier investors pumped an additional $30 million into Cyanogen, among them: Benchmark, Andreessen Horowitz, Redpoint Ventures and Tencent. Microsoft, which considered investing in Cyanogen, is not participating in the current round, according to people familiar with its decision. But, these people say, Microsoft and Cyanogen are close to ﬁnalising a wide-ranging partnership to incorporate several of Microsoft’s mobile services, including Bing, the voice-powered Cortana digital assistant, the OneDrive cloud-storage system, Skype and Outlook, into Cyanogen’s devices. The companies refused to comment, but at least one smartphone maker said his company was planning to sell a Cyanogen phone with many of those services built in later this year.
“App and chip vendors are very worried about Google controlling the entire experience,” says Peter Levine, partner with Andreessen Horowitz. That’s particularly true for ﬁrms that compete with Apple or Google, among them Box and Dropbox in cloud storage; Spotify in music; Facebook, Twitter, WhatsApp and Snapchat in messaging; Amazon in commerce; and Microsoft in a wide swath of sectors. The lessons from the PC era, when Microsoft used its Windows monopoly to sideline rivals and dictate terms to PC makers, still resonate. A third choice would be welcome and unleash a new wave of mobile innovation.
Cyanogen has a chance to snag as many as one billion handsets, more than the total number of iPhones sold to date, according to some analysts. Fifty million people already run Cyanogen on their phones, the company says. Most went through the hours-long process of erasing an Android phone and rebooting it with Cyanogen. McMaster is now persuading a growing list of phone manufacturers to make devices with Cyanogen built in, rather than Google’s Android. Their phones are selling out in record time. Analysts say each phone could bring Cyanogen a minimum of $10 in revenue and perhaps much more.
Of course, far more powerful players have tried and failed to establish a third mobile OS in the last several years: Microsoft, BlackBerry, Samsung, Mozilla, Nokia, Intel, Palm. McMaster is well aware of this history, which is why, he says, co-opting Android is the only way down the path. Then, by opening up Cyanogen’s code in ways that neither iOS nor Android have done, McMaster is hoping to attract app developers who feel hemmed in by Apple and Google. A company like Visa or PayPal would be able to build a contactless payment system that works just as well or better than Google Wallet. Skype could be built into the phone dialler. A service like Spotify could become the default music player on a phone. “In a perfect world, the OS should know I use Spotify for music,” McMaster says. “I should be able to talk to the phone and say ‘Play that song’ and the f*%&ing song plays with Spotify. It doesn’t do that today.”
McMaster and his crew are busy courting other phone-makers. Last year, Micromax, the market leader in India, began selling Cyanogen phones under its high-end Yu brand. (The deal, which made Micromax the exclusive Cyanogen seller in India, led to something of a falling-out between Cyanogen and OnePlus.) The company has released the phones in batches through its online store; they sell out within seconds. “People are lapping it up,” says Rahul Sharma, CEO of Micromax. “Every week, we are ramping up production.” Sharma says he chose Cyanogen to meet customers’ demand for phones they can personalise. In many ways, Micromax is following in the footsteps of Xiaomi, the $46 billion Chinese behemoth, which built a buzzy brand and a loyal following by creating highly customisable phones. But rather than hire an army of programmers to develop the software, as Xiaomi did, Micromax has outsourced the task to Cyanogen. Other brands in emerging markets are sure to jump on the same bandwagon, says Asymco’s Horace Dediu, an inﬂuential industry analyst. “Cyanogen is now an enabler for the next Xiaomis.”
There are likely to be many of them. In March, Alcatel, the number seven mobile phone-maker in the world, said it will bring to the US its 6-inch Hero 2+ running Cyanogen, for $299. Meanwhile, mobile chip-set powerhouse Qualcomm said it will build Cyanogen into its “reference design”, a sort of technical template that smaller phone-makers the world over use to create phones under their own brands. The ﬁrst true expression of McMaster’s vision should come later this year in a phone being made by Blu. The Miami company has become one of the most popular phone-makers in Latin America; its phones are sold in the US through Walmart and Best Buy and are among the best-selling unlocked phones on Amazon. Blu says it will launch the ﬁrst Cyanogen phone that will be stripped of Google’s suite of mobile apps. While Samuel Ohev-Zion, Blu’s CEO, says all the details have not yet been worked out, he envisions a phone that will use Amazon’s app store, the Opera Web browser, Nokia Here for maps, Dropbox and Microsoft’s OneDrive for cloud storage and Spotify for music. It would also have Bing for search and Microsoft’s Cortana as a replacement for Google’s voice assistant. “When these other apps are deeply integrated into the phone, most of the time they perform better than the Google apps,” says Ohev-Zion. Phones like these are how Cyanogen will make its real money. Today the company earns minimal revenue, selling “themes” that users can apply to customise the look and feel of their phones. (It currently relies on the Google Play Store for billing, but over time plans to build its own store.) The bigger opportunity will be from revenue-sharing deals with app developers who integrate their services deeply into Cyanogen-based phones. The deals will take many forms, from distribution to in-app purchase agreements to customised services for speciﬁc countries, says Vikram Natarajan, who runs business development for Cyanogen. In some cases, the company will share the revenue from those deals with phone-makers that are struggling with narrow margins. “We will give them revenue over the lifetime of the handset that they never had before,” Natarajan says.
Despite McMaster’s belligerent tone, Cyanogen can succeed with- out doing real damage to Google, which declined to comment. During an onstage interview at the Mobile World Congress in Barcelona, Sundar Pichai, the company’s head of products, who oversees Android, said he’s unsure what Cyanogen’s selling point is. He also noted that Google’s services are very popular and questioned the viability of phones that don’t include them.
More likely, Cyanogen’s success would amount to a huge lost opportunity for Android and hem in the company between Apple at the high end and Cyanogen elsewhere, complicating Google’s prospects at a time when investors are worried that Google will never make as much money in mobile as it did on the desktop. Still, even some Cyanogen allies are not fans of the taking-down-Google talk. “Kirt’s aggressive and has a lot of bravado, and I don’t think the company would exist without it,” says Sandesh Patnam, of PremjiInvest. “I wish he didn’t poke the bear too many times and so loudly.” That said, McMaster’s open swipes at Google may have ancillary beneﬁts beyond generating headlines: They make Cyanogen visible enough that Google, which operates under the glare of anti-trust regulators, may think twice before doing anything that could be construed as undermining a potential rival. It’s also what charges up McMaster. “As with any great myth, you need a common enemy,” he says. “Right now, Google is the common enemy.”
(This story appears in the 01 May, 2015 issue of Forbes India. To visit our Archives, click here.)