Chinese social networking operator Renren Inc (NYSE:RENN) is betting on the high premium Internet users are putting on the security and privacy of their data. The company was among several investors that poured money into Sirin Labs, a maker of high-end, top-security smartphones. Sirin raised $72 million from a seed round through investors including Renren.
But Renren Inc (NYSE:RENN) is trying to be secretive about its relationship with Sirin. For example, the company has refused to comment on its role in the startup’s recent fundraiser. Nevertheless, it is not difficult to see why Renren would be interested in forging a strong relationship with a maker of secure handsets.
All social media companies these days worry about the security of their platforms. Given the rise of government-sponsored spying and self-motivated hackers seeking to steal trade secrets or defame, a high price is being placed on data security. But there aren’t enough smartphones out there that can guarantee what one might call military-grade data security. BlackBerry Ltd (NASDAQ:BBRY) used to be known for its secure handsets, but the company is gradually fading into oblivion, leaving a gap. It is that gap that Sirin wants to fill and Renren Inc (NYSE:RENN) apparently believes that filling that gap is in its best interest.
The company boasts more than 160 million subscribers on its social network platform. To keep the number growing rapidly and make those who are in to remain there, Renren Inc (NYSE:RENN) is betting on data secure. That explains why the company is working close with Renren. China is one of the places where enterprises and business executives are leaving nothing to chance to protect their data and Renren can take advantage of the trend to make its platform stickier and open up new monetization opportunities.
It’s no cheap phone
But Sirin’s smartphones won’t be cheap initially. The phones will cost anything between $10,000 and $15,000. With that a customer will get on their hands a device that boasts military-grade safety and features for an everyday phone. Many Fortune 500 executives would be interested in such a device.
For Renren Inc (NYSE:RENN), the opportunity to add another competitive advantage to its platform is beckoning.