Aphyos Startup ScreenSource: CrackBerry Kevin

CES 2023

I know, I know. With a headline like that the rest of this writeup better deliver or I'm going to get skewered in the comments. And I get it. In a world absolutely dominated by Apple's and Google's ecosystems, it seems daft to think anybody has a shot at creating an alternative mobile OS that would have any chance of succeeding. Especially true considering that so many others including Palm, BlackBerry and Microsoft tried … and ultimately failed.

As promised, after having a chance to talk to representatives of Swiss-based startup Apostrophy AG at CES on Friday (we met in front of the BlackBerry booth!) and spending some time playing around with AphyOS, I want to believe. Heck, I'd even go a step further and say I want to invest.

It's been a long time since I picked up a new piece of technology that got me this excited. Unlike my first experiences with webOS or BlackBerry 10 over a decade ago where it was futuristic swipe gestures that had me grinning ear to ear, it was a much different but equally compelling feeling that I was digging again — FREEDOM. My recent experience with the Punkt phone made it clear I'm more than ready for an exciting new phone, as well.

It's odd to think that we can be held captive by a handful of companies, but that's the reality of the modern BIG TECH world we live in. What Apostrophy aims to do is bring some much-needed choice back into the mobile OS game, and the way they are going about it is pretty damn clever.

While the FAQ on Apostrophy's website will fill you in on many of the details about the company and what it stands for (including their four pillars of People, Privacy, Planet and Productivity and why the company spells Apostrophy with a y instead of an e), here were my top three takeaways from the discussion.

1. AphyOS is subscription-based

Aphyos Homescreen DomusSource: CrackBerry Kevin

This is so crazy logical I'm surprised nobody has tried it yet. We live in a digital world where paying subscriptions is the norm. Think Netflix and Amazon Prime.

Yet when it comes to our mobile OS we pay for those software features and security updates in less clear ways.

Apple is straightforward. It makes its own hardware and software, so for the company to cover its bills and be massively profitable, you pay "the Apple tax" and pay a big premium over the hardware and material costs. We all cringe at this tax, of course, but it's at least clear who you're paying. Then they upsell you on more services which leads to an annual Apple One subscription payment. Cha-ching!

With Google and Android, things get murkier as many companies build smartphones running Android OS with Google Mobile Services (GMS). In this case, Google charges phone hardware original equipment manufacturers (OEMs) a licensing fee to put GMS on their phones. Google makes money there. Then the real money comes in when you as an end user accept their terms and conditions. While it doesn't cost you cash, you pay for it by selling what I've begun referring to as your "digital soul", where the use of any Android phone with GMS (or most Google-powered apps or services) gives the company the right to leverage your data and device usage to power an ad industry that helps it mint mega amounts of moolah. CHA-CHING!

'If you're not paying for the product, you are the product.'

The best quote from the Netflix documentary "The Social Dilemma" is "If you're not paying for the product, you are the product!" which more or less applies to everything Google does.

By going with a subscription-based model, the relationship is more honest and open between the hardware manufacturer, OS maker, and end user. Of course, in this scenario, the end user is the one paying for the OS so the value being offered by the OS has to make it worth it.

From a privacy perspective, Apostrophy is the antithesis of Google Android. Whereas Google's approach would be to share all your data by default, "with AphyOS it's like you live your digital life in Incognito Mode by default" and if you want to flip that switch off on a case by case (or app by app basis) you can, but it's your choice. To build extra value into the offering, Apostrophy bundles in extra services that will enhance the phone's out-of-the-box user experience.

An annual OS fee also helps solve one of the biggest problems that has always plagued Android, which is security updates. With the current model, an OEM pays Google an upfront licensing fee for the right to put Android with GMS on a phone. The OEM (hopefully) makes some margin when they sell their phones to a user, and then there's an expectation that the OEM will support the phones with security updates for several years. This is why so many OEMs have fallen short on their security updates over the years; the money comes up front and the support expenses for that device are incurred for years and years even though there's no more revenue coming in tied to that initial phone sale (only Google continues to profit via your data).

With AphyOS, you live your digital life in Incognito Mode.

On the flip side, Apostrophy will share a portion of the subscription fee with the OEM each year the user renews. When you buy a phone running AphyOS the phone maker receives the money and your first year of AphyOS is paid for. When you renew your AphyOS subscription, AphyOS receives the payment and shares a portion of that back with the OEM which holds them accountable for implementing security updates and gives them an additional source of revenue beyond the one-time upfront sale of the device.

In my mind, this model is just so damn logical that it feels like Google should have already adopted it years ago (or at least made it an option) as it would have kept more OEMs in the Android game had there been an ongoing rev share. Instead what happened is that so many handset makers could not maintain profitability in selling Android phones that over time they were forced to exit the business (I always loved HTC phone hardware).

While partner announcements will come later this year, the company has already lined up its first two partners and aims to have more. And yes, I asked them what happens if you switch between AphyOS on two different devices. You can move your subscription over and around as desired, which you may want to do if you upgrade your phone halfway through an annual subscription.

2. AphyOS is based on GrapheneOS and other open source technologies

Aphyos Brave BrowserSource: CrackBerry Kevin

When Apostrophy first came up with its vision it began from a starting point of "zero trust" and began its exploration into the best existing technologies to incorporate into its solution, including those from the open source community.

Apostrophy's model is so damn logical Google should have adopted it years ago.

As nobody would buy a proper smartphone in 2023 without the ability to have all the apps!, the starting point for Aphy is a Linux kernel running Android Open Source Project (AOSP). However, to get away from Google's stranglehold on user data, a de-Googled version of Android must be utilized that mitigates Google's infiltration into system-sensitive areas of the OS.

This is where AphyOS is based on GrapheneOS, a non-profit open-source project that has done an amazing job of creating a private and secure mobile OS that is Android app compatible. GrapheneOS is next-level ninja in that it will even allow you to run the Google Play Store (and its associated support libraries) in a sandboxed environment on the device yet be treated with equal, neutral, access to services as any other application. Basically, GrapheneOS figured out how to outGoogle Google (in a way that it allows or can't prevent) by letting you run apps that would normally want and take your data back to the Google mothership in a way where they can't.

Last year, I picked up a Google Pixel phone and installed GrapheneOS on it. It's frack'n brilliant. If you're super privacy and security-minded I'd recommend going this route immediately, but by its nature, it's extremely pure and bare so it's going to appeal most to somebody more tech-savvy who has time and interest to invest in setting up their device (you can donate to GrapheneOS — it's a project worth supporting!).

GrapheneOS is next-level ninja in how it securely runs the Google Play Store.

That's where Apostrophy steps in, to base its AphyOS solution upon GrapheneOS and add as much additional value for its customers as possible through additional features and services that make the out-of-the-box experience as easy, enjoyable, and productive as possible. In some ways, you can think of Apostrophy trying to do what Red Hat has done in the enterprise space, where it's a leader in commercializing open-source solutions.

While they're calling it AphyOS, it's worth clarifying that their solution is more than just the operating system on the handset - there is an entire back-end system combined with several user-facing services, so it's much more than just a repackaging of GrapheneOS.

As noted, Apostrophy works directly with handset makers, allowing the OEMs to decide how easy they will make it for end users to load and access the Google Play Store. There will be a default version of AphyOS but a particular OEM may want to customize its version to have a different version that speaks to its brand and the particular product they are selling.

AphyOS will also come with its own Android application store and its own SDK. That is not to say that app developers need to start from scratch as most applications already run inside the base GrapheneOS.

3. A neutral OS with servers and services located in Switzerland

As much as I'd love to see another Canadian company take up the mantle of a BlackBerry 10 successor (friendly reminder that CrackBerry Kevin is Canadian, eh!), if it has to be a different country then Switzerland is definitely the place to build it.

The location of Apostrophy AG in Switzerland is not a matter of chance. Per Apostrophy's FAQ:

"Apostrophy is a Swiss mobile tech company that prioritizes personal data sovereignty. The increasing European stance on data use is leading-edge, and Switzerland leads the world in the convergence of law and tech in this space. The location of Apostrophy is intentional: It speaks to the company's commitment to policies that cannot be met in Silicon Valley or any other location that has not integrated its laws and technology to meet the needs of the people." Apostrophy is a combination of a secure mobile operating (AphyOS) and a set of back-end personal information management and security services. The service hardware and operations are all managed within Switzerland by a team of security experts.

In true Swiss fashion, Apostrophy aims to be neutral, in that it will provide an actual alternative to iOS where the user is put first, not their data. The company doesn't view Android with GMS as a viable choice for anyone who cares about privacy.

Will Apostrophy be able to pull all this off?

Aphyos Launch PlansSource: CrackBerry Kevin

Most startups jump on trends as that's where all the investment dollars flow. Walking through the show floor of CES this past week it's clear there's no trend around mobile OS startups. That was 15 years ago. Now it's EVs and robots and AI and web3 and all that jazz.

Apostrophy taking on a project like this is clearly out of sync with the trends. And I think that's a good thing.

That said, it feels like the right time to actually attempt something this ambitious. The smartphone category has matured — actually having niche offerings again is a way to differentiate. In the early days of smartphones, the differentiation was based on figuring out the right form factor and winning the apps race. Now we're seeing innovation in form factor come back to play (foldables!) and I think in a similar manner having an OS that gives you access to all the apps but takes a stance on privacy would appeal to a certain group of people.

Through my experiences with BlackBerry users, I know there's a pent-up demand of people who have been waiting for something akin to a successor to BlackBerry 10. I look at all diehard keyboard phone fans who wouldn't buy a BlackBerry KEYone or KEY2 because it ran on Google Android as a good example of that. There's also a new, younger generation of consumers emerging who take their privacy and use of data very seriously. The recent rise of web3 and crypto is full of these consumers.

If you think of market demand as a bell curve, I see us older security-focused BlackBerry types at the far right, and this new generation at the far left with the blissfully unaware and/or doesn't care consumer in the middle, which makes up the vast majority. Right now both these segments are at the fringes -- still meaningful in absolute numbers as there are billions of smartphone users on the planet -- but with an available solution and time that speaks to both audiences, I can see the market growing from both ends.

Beyond the desire's of consumers, it's clear that legislation in regard to privacy and data is already going in this direction with Europe (and California in the US) leading the way. I think even the fact that Apostrophy is European is a differentiator that will appeal to a lot of European users. That an open-source project like GrapheneOS has matured to a point now where a commercial entity can base a strong consumer offering on it makes sense, too.

Apostrophy is out of sync with the latest trends. And that's a good thing.

In reality, what Apostrophy is doing is more of a business model innovation than a technical one. That's why I think there's a chance they can actually pull this off. It's not futuristic features that have me excited about what this company is up to; it's the business model and philosophical stance. Where others have tried and failed in the earlier era of the smartphone OS wars, Apostrophy is taking a novel approach which, based on my first glimpse, appears to have real merit. And having had a chance to play with it, I can attest it's not vaporware.

Whether the company can pull it off comes down to its ability to execute effective go-to-market execution. These days everything has to be there — it takes money, experienced people, aligned partners, and the ultimate product that ships has to be exciting enough to generate consumer interest (though in this case, I could see AphyOS speaking to business and government interest as well).

The team has a lot of industry veterans on it, and it has its first OEM partners lined up, so that's a solid start.

I'll be watching with interest to see where this goes. You should too.

Disclosure Update: As of January 26, 2023, Kevin Michaluk became an investor and advisor in Apostrophy AG