Web3 Is Set to Permeate Smartphone Industry
This article is authorized to be translated from the original article of Huxiu. Original title: Web3“入侵”手机圈 Author: Zhou Zhou. Copy editor: Peter Catterall
“The news has not been officially disclosed,” an individual close to Huawei said to Chinese media outlet Huxiu. “Huawei has at least three departments studying and exploring Web3, and the HarmonyOS team is one of them.”
Huawei is just one of many smartphone manufacturers exploring Web3. Before Huawei, Samsung and HTC have already worked on it, successfully combining Web3 with their own smartphone hardware. Nothing, a rising tech startup, also followed a similar pace.
It’s not just well-known smartphone manufacturers who want to explore the application of Web3 on smartphones. Since June this year, Solana and Polygon, two blockchain giants, have also started to explore Web3 smartphones.
An industry insider said: “At present, most Web3 products are displayed on computers’ web pages. If Web3 companies want to search for new growth points, smartphones have become an inevitable field for them.”
By definition, Web3 companies are also internet companies. Compared with traditional internet companies, they have an obvious feature – they constantly try to be decentralized, and gradually regain the control of data and finance from entities such as the Federal Reserve, Apple, and Tencent, and return them to the public. In the process of realizing “financial democratization” and “data democratization,” most of them inevitably become a semi-centralized and semi-decentralized institution in order to obtain more users.
At present, some excellent Web3 companies in fields like crypto, DeFi, and NFT, have millions, tens of millions or even over 100 million users. For example, STEPN, Metamask, and Binance have 3 million, 30 million, and 120 million users respectively. Although there is still a giant gap between user numbers of Web3 companies and traditional internet companies, Web3 products show the same growth speed as internet companies. The number of users of a prevailing product can exceed millions or even tens of millions in just a few months.
For smartphone manufacturers, Apple, with a market value of $3 trillion, is quite a competitor in terms of hardware, operating system and apps. It seems like a better choice for them to explore the Web3 field with more than one million DApps (decentralized apps) in advance. Moreover, the ecosystem that Web3 builds to rival Apple’s is also a new opportunity for smartphone makers.
The gate of the Web3 smartphone field is being slowly opened by people inside and outside the wall.
Outsiders Want In
Web3 is like a city that has just dug up a gold mine, attracting the close attention of people outside the city.
These outsiders can be roughly divided into many categories, such as the internet circle (including Meta, Google, Amazon, and Twitter), banking circle (including JP Morgan Chase, Unibanco, Brazil’s largest private bank, and BNY Mellon), investment circle (including Sequoia Capital, SIG, A16Z), sportswear circle (including Nike, Adidas, Puma), news circle (including The Wall Street Journal, The New York Times, South China Morning Post), luxury goods circle, automobile circle, sports circle, film and television circle, and more. These outsiders all want to do something to create more revenue and value through Web3.
The smartphone circle, as one of these that can affect the development of Web3 most, has attracted the attention of many people in recent two months. Huawei, Samsung, HTC, and Nothing have all begun to explore Web3.
HTC and Nothing will announce the launch of new Web3 phones in the second half of this year.
In June 2022, HTC released a new version of a Web3 smartphone, which makes it easy to manage cryptocurrency and NFTs. The smartphone has a built-in encrypted hardware wallet that allows users to purchase and store NFT assets on Ethereum and Polygon.
Different from the previous version launched in 2018, the new model not only has a built-in wallet, but also provides users with a virtual space through NFTs. HTC also tries to combine various elements such as cryptocurrency, NFTs, VR and smartphones to create a metaverse smartphone with an immersive experience.
“NFTs are the cornerstone of the metaverse,” one industry insider pointed out. “The non-fungible characteristics of NFTs make everything such as props, buildings and characters in the metaverse unique, so that the virtual world has a more stable economic system and better meets the requirements of human beings for their immersive experience.”
In July 2022, Nothing cooperated with blockchain giant Polygon and officially launched its exploration of Web3.
“We want to shape a decentralized world and help users take back control,” Arjun Kalsy, the vice president of growth at Polygon, said. “Every Apple and Android phone that people use needs to log in to a Google ID or Apple ID. To some extent, Apple and Google have customers, and users have no right to choose the use of data. People are used to being controlled by these two companies.”
Nothing’s idea may be simpler. If this newly established company wants to break through the smartphone industry with many giants such as Apple, Huawei and Samsung, it needs to embrace the latest technology trends more actively in order to gain users in sub-sectors.
Nothing’s wireless headset launched in 2021 supports crypto payments. Now, it has further integrated Web3 into the smartphone, hoping to seize market opportunities not yet addressed by industry giants.
In the past two years, Web3 has made great progress, and both in the basic layer and the application layer, it has shown the potential to influence smartphone ecology and even the mobile internet.
According to the latest data from KingData, there are more than 1 million DApps on BSC and Ethereum alone.
In terms of the application layer, there are far more than 1 million DApps, and products with millions or even tens of millions of users such as STEPN and Metamask have been born. In terms of the basic layer, there are more than 95 Web3 wallet projects (equivalent to the App Store) and 127 public chain projects (equivalent to Apple IOS system).
One crypto fund investor told Huxiu, “In a not very appropriate metaphor, DApps are equivalent to the apps people use now, while wallets are equivalent to the App Store, and public chain is equivalent to Apple’s IOS system. Web3 is building a complete set of systems to change or even subvert the current mobile internet.”
After more than ten years of development, the existing smartphone system has formed a very harmonious state with apps. However, there are always various frictions between DApps and the existing smartphone system. “The current smartphone system is not friendly to DApps. Smartphones do not support the crypto framework, and some of the underlying infrastructure of DApp is not well established, and each replacement requires more costs,” a Web3 entrepreneur told Huxiu.
Nothing is working in advance, hoping to become the first choice of Web3 smartphone users by applying Web3 to smartphones. Polygon hopes that through cooperation with Nothing, users will have easier access to DApps such as Game-Fi, and realize easier payment and crypto security identification.
As a leader in international smartphone brands, Huawei has shown great interest in Web3 both in overseas teams and in domestic teams.
“Many domestic departments or teams in Huawei are exploring Web3, including Huawei Cloud, HarmonyOS, Huawei Wallet, etc,” a source close to Huawei told Huxiu.
Huawei’s strategy is more flexible overseas. In May, Huawei tweeted an NFT called Caked Apes, causing the range’s reserve price to soar. In addition, Huawei Cloud provides cloud services for Web3 games such as Ankots of Misteria and Revoland.
Huawei, Samsung, HTC, Nothing… More and more smartphone manufacturers are beginning to pay attention to and explore Web3 smartphones. However, the key factor in whether Web3 smartphones will become the future trend is not these companies, but the “Web3 Natives.”
Web3 Giants Want to Explore More Fields
The development history of Web3 is the course of exploring different circles again and again.
From the beginning of a single currency (Bitcoin), it developed into an independent financial system (DeFi), then an economic system (NFTs) with more interaction with the real business world. Web3 is constantly reaching more and more groups.
Coverage of Web3 has been limited to the web side, but 99% of users are more used to using mobile phones. Occupying the mobile terminal and making an influential Web3 smartphone are expected to be the landmarks of Web3.
In June 2022, Solana announced that it would officially make a Web3 high-end Android smartphone. This smartphone will use its carefully designed software – Solana Mobile Stack (SMS) – which not only adapts smoothly to Web3 mobile phones so that every transaction is kept on the chain, but also creates a decentralized app store.
SEE ALSO: Solana Mobile Debuts Saga, Flagship Android Phone for Web3
Solana hopes that each smartphone will have not only an App Store, but also a DApp Store. In the former’s ecology, users can download apps such as Tencent and Alipay, while in the latter’s ecosystem, users can download DApps such as STEPN and Metamask.
Solana’s smartphone is a real Web3 smartphone. Although Polygon works with Nothing, the smartphone they jointly developed is still under Nothing’s brand instead of Polygon. Solana works with OSOM Products, but their smartphone is under Solana’s brand.
This is a key difference. Web3 natives finally have enough financial resources, technology and ecology to influence the world outside Web3. They may be able to compete with traditional giants such as Huawei and Samsung in the future.
“Ethereum hopes to become a more pure decentralized organization,” Ning Wentao, investment director of Glock Ventures, told Huxiu. “It is the most successful DAO at present, and Solana and Polygon, two blockchain giants, are essentially based on Ethereum. They are more inclined to expand outward. They are more like a semi-centralized and semi-decentralized company.”
In terms of developing a Web3 smartphone, Huawei, Samsung and HTC are still focusing on hardware services, while Solana and Polygon are expanding around the core of Web3.
Solana’s work starts from public chains, wallets and DApps to the DApp Store, smartphone software and smartphones, shaping itself into a Web3 empire step by step. “In order to build a brand-new mobile ecosystem, Solana has launched a special fund of $10 million to encourage the development of mobile DApps,” Solana said on Twitter.
Solana’s goal is to reach more users, and it hopes that its software can not only be used by itself, but also by Android phone makers such as Samsung and Google. Anatoly Yakovenko, the co-founder of Solana, said: “If this software is adopted by major Android smartphones, people may witness the arrival of the next era of 1 billion Web3 users in the future.”
Polygon also made similar remarks, arguing that Web3 smartphones can make it easier for users to access DApps, make crypto safer and payment more convenient, encouraging the entrance of several hundred million users in the future.
Centralized giants such as Samsung and HTC are trying to decentralize step by step. Decentralized giants such as Solana and Polygon, meanwhile, choose partial centralization in order to reach more customers. They seem to have reached a consensus: The centralized world is dangerous and monopolistic, and decentralization brings more opportunities to innovators and more choices to users.
Two Trends: Mobile First and APP-Chain
“The Web3 world is almost separate from the real world,” the CEO of a startup expressed to Huxiu.
This gives a general impression of Web3, a field that not only has its own economic system and technology, but has even developed a language system that is difficult for outsiders to understand. It also reveals the dilemma of Web3 development at present: insiders are in full swing, while the public is confused.
Luckily, this phenomenon is constantly changing. From the currency circle, the financial circle, the internet circle, to various traditional industries, Web3 tends to rebound with vitality every time people think it will perish. An investor from a well-known domestic venture capital institution told Huxiu, “In China, overseas concepts in Web3 are developed in a different path and face restrictions, such as cryptocurrency versus digital RMB, public chains versus alliance chains, NFTs versus digital collections. Perhaps its growth base is different, but its vitality has always been there.”
Where will the next big breakthrough happen? Mobile first and APP-Chain, Xie Guangwu, a researcher at AnchorDAO, points out.
Previously, most of the products of Web3 companies were displayed in the form of web DApps, not in the form of apps. This greatly increases the threshold for users to enter Web3.
According to Xie: “On the one hand, due to the limitation of industry infrastructure and talent, neither the iteration of the underlying public chain nor the investment in application layer is enough to support apps with large-scale users to run on a certain public chain. There is also no relatively mature mobile development team to invest in Web3. On the other hand, in the face of global crisis, practitioners of Web3 should have a mission to bring a decentralized free financial network to a larger number of mobile users. For those relatively closed developing countries, users mainly focus on mobile devices. In fact, the kernels of Mobile First and APP-Chain no longer only focus on the bottom layer of blockchain, but will influence more users and make blockchain within reach in a more inclusive and convenient way, which will in turn further strengthen the robustness of decentralized network.”
With the staged success of STEPN, people have seen the great potential of Web3 products on the app side and its driving effect on the public chain. Making an independent app can not only make the user experience better, but also form a closed loop of the company’s own ecology. STEPN is not only a game, but also a wallet product and an NFT platform.
STEPN’s success is making more users become Solana users. Binance discovered this and worked with STEPN to get more people to use Binance. This is the best case scenario, in which an app drives a chain’s users to grow.
The goal for Web3 smartphones is several hundred million users. To achieve this, changes from DApps, software, operating systems and smartphones are indispensable.
Rest of the Best
Binance, Metamask, STEPN, and CoinSwitch have 120 million, 30 million, 3 million, and 10 million users now. In the past 10 years, Web3 has experienced ups and downs, and people’s understanding and definition of it have been constantly disintegrated and reshaped.
Now, it stands at a new level. It not only has an impact in monetary and financial fields, but also has a wider impact in the real world, the internet industry, listed companies and traditional enterprises through NFTs in the past two years.
Nowadays, an important point facing Web3 is that most products have not adapted to be displayed in front of users in the form of an app, which is directly related to whether the public can access Web3 products. Smartphone giants and Web3 giants alike have been trying to solve this problem.
At present, the internet is still a world full of defects. All the well-known internet companies need to adapt to Apple’s ecology in the form of apps to survive. Even Tencent and other internet giants often agreed to Apple’s tough terms. When Apple “exploits” internet companies, they in turn began to “exploit” the public’s ownership and use of data, which brings more reasons and opportunities for the emergence of Web3.
Web3 has opened up a scientific, technological and economic system independent of the real world. Tens of thousands or even hundreds of thousands of teams have competed in this independent ecology. We have already seen some leading players emerge.
After the next breakthrough, more apps will be displayed before our eyes. The carriers of apps are no longer just computers, but smartphones, VR devices, AR devices, car OLED panels and other hardware.
About Huxiu
As a Chinese media focusing on technology and innovation, Huxiu is committed to providing efficient information services for all users who love thinking and discovery, so as to help them achieve better creation through accurate insight into the world.
