Money talks: Everyone complains about privacy, but nobody buys privacy-centered phones

Click over to practically any news site and do a bit a scrolling. It won’t take you long to run across content relating to privacy concerns. In a world where distrust in governments is at a high, NSA snooping programs are regarded with hostility, and massive companies track our every online movement, it would seem that consumers at large value their privacy and are willing to protect it at any cost.

So it’s no surprise that a variety of tech companies looked around at this environment of paranoia and personal invasion and said to themselves, “Hey, clearly there’s a market technology that protects its users’ privacy.” Folks like Silent Circle staked out their territory within this niche, and even Blackberry put a lot of eggs in the Priv basket, a smartphone with a name that’s short for “Privacy.” Unfortunately, this target niche has turned out to be far smaller than these companies anticipated.

Silent Circle’s Blackphone is canary in this mineshaft. The device has experienced revenues hundreds of millions of dollars lower than Silent Circle projected, and as a result they have been unable to pay the $30 million they owe to their former partner Geeksphone. The resulting court case cast light on just how massive the disparity is between a perceived interest in a privacy-focused smartphone and actual consumer engagement in the form of money changing hands.

Customers aren’t the only ones exaggerating their interest in privacy. Between BigOn Telecom, Kumion, Sumion, and American Movil – all of whom expressed strong interest in buying privacy-focused smartphones in bulk – Silent Circle was expecting guaranteed corporate sales somewhere in the ballpark of 250,000 devices. Actual sales were far bleaker, with BigOn and Sumion pulling out entirely and America Movil purchasing just 6,000 of the 100,000 they said they would be interested in buying.

Silent Circle has had to lay off 15 percent of its employees over the last six months, and the future of any future Blackphone devices looks dark.

This is bad news for a variety of companies including Turing, Sikur, and SIRIN LABS Labs, all of whom have been targeting a demographic that is proving to be far smaller than anyone anticipated. Blackberry, at least, appears to be thinking on their feet by launching a trio of new devices that appeal to a variety of potential buyers.

What do you think of the gap between the apparent size of a privacy-focused audience and its actual size? Have consumers just not felt the sting of privacy invasion enough to justify forking over the extra cash? Do you personally have any interest in buying a smartphone sporting privacy as a core selling point? Sound off in the comments below!