Recent exposures of loopholes in iPhone have raised more concerns about information security in China.

Fang Xingdong, founder of China's leading hi-tech think tank Chinalabs.com, wrote a commentary in the Beijing-based Global Times in late July, calling for a ban on civil servants using iPhones.

Fang said that the Chinese Government's recent security concerns are normal for any country. "Some countries impose even stricter controls than China does," he said, adding that foreign companies may see more limitations in sensitive areas, including the finance and transportation sectors, in the future.

The possible ban may cause government departments and state-owned companies to decide to purchase homegrown products instead of foreign-invested ones, which is likely to influence the foreign companies' performance in the Chinese market, said Fang.

A good chance

The Apple incident has sparked fear among Chinese smartphone users, especially those who work in the government, where security is their top concern.

A mobile industry insider said there has been an increase in the amount of encrypted smartphone orders civil servants have placed to local manufacturers since July.

"About 500 to 1,000 such phones are purchased from Shenzhen to be sent to Shanghai in a single order every time Shanghai is out of stock," the insider told the Shanghai Morning Post.

A Shanghai government official told the newspaper that he had switched to a domestically produced phone with encryption because of his need for better security.

"I often access internal documents and sensitive economic data at work," said the official. "If my phone is tapped or the data is leaked through security backdoors, it may lead to the stealing of information."

Apple is not the only mobile phone company losing popularity. Samsung's China smartphone sales decreased to 13.2 million units from 15.5 million a year earlier during the April-June period, according to a market investigation.

Local brands have benefited from the decline. Xiaomi became China's top-selling smartphone brand in the second quarter this year, selling 15 million smartphones in China, surpassing foreign mobile giants, according to market research company Canalys.

Coolpad recently launched the first batch of 4G smartphones that come with encryption approved by the government.

"Our main customers are corporate leaders and government officials," said Xiang Fei, General Manager of the Shanghai Branch Company of Coolpad Group Limited.

According to Xiang, his company has provided 4,000 encrypted smartphones for officials in different departments of the Shanghai local government recently. Police departments in Hunan Province and the Aviation Industry Corporation of China are also using smartphones with an encryption service, he added.

A civil servant in Shanghai said that all staff members in his department switched to domestic encrypted phones in 2011.

"With more leaks of sensitive information in recent years, I believe the promotion of encrypted smartphones among civil servants will increase," said Zhu Lijia, a professor with the Chinese Academy of Governance.

Wang Yanhui, General Secretary of the Mobile China Alliance, said the trend implies a crisis of confidence toward foreign brands.

"The technology and operating systems used by domestic and foreign phones are very similar, but what puts the foreign brands at a disadvantage is a lack of trust by the government," Wang said. "Domestic phone companies are stronger in terms of understanding and catering to the government's needs in terms of security."

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