I'm not giving much to the various "whatsapp backdoor" allegations but I'm curious to why they'd have financial incentive to provide privacy.
Most of their userbase likely still doesn't care about security and they do belong to Facebook - so if anything, they'd have a financial incentive not to use effective crypto.
If hackers could get access to WhatsApp and dump all messages to Wikileaks it would make the company look very bad and a significant number of users would switch to something else. If security is not that important to users, why pretend to add end-to-end encryption at all?
Teen Vogue just suggested people should use WhatsApp instead of Snapchat because it does end-to-end crypto. I don't think it's true any more that the general public doesn't care about security, if it was ever true.
Facebook cares mostly about penetration for Whatsapp, to ensure that no other messaging app takes over.
Free product advertising worth $N targeted to the more influential product adopters, who will then amplify said advertisements.
That's my guess, anyway.
If you want a completely free software smartphone experience, it is simply not possible at the moment. Even Replicant[1] still hasn't cracked the baseband puzzle (and is still struggling with the firmware for a couple of phones).
So no, Android is definitely proprietary -- even if some parts are not.
If you want a completely 'free' (as in GPL) cell phone experience, you can setup a OpenBTS transmitter and transmit at the 900mhz range which is commons property. To stay legal in the US, your antenna has to put out less than a watt, but the setup allows you to even use off-the-shelf phones and trunk into normal phone lines via standard POTS software. Your device would have to be something a-la http://alumni.media.mit.edu/~mellis/cellphone/ (just a janky setup, but just a proof-of-concept -- you can patch together components from DigiKey pretty easily these days; if you want free-silicon, I think the closest you're going to get is https://en.wikipedia.org/wiki/OsmocomBB or maybe some soft cores, but if you're actually going to take that soft core to tape-out, you're probably going to be running 6 figures just for masks...)
Initially looking to reuse old phones with the Calypso chipsets, the project is now working on producing their own. Design files are completed; funding for the dev boards is about 66% complete.
https://www.freecalypso.org/fcdev3b.html
Mailing list is fairly active too.
While (AFAIK) there isn't a regulation stopping someone from selling radios that have completely free software basebands, you can bet that the manufacturer will be prosecuted if users suddenly start outputting radio waves that don't follow regulations (suing users is harder than suing a manufacturer). As a result, there's a disincentive for manufacturers to ever sell free software radios (because by definition they would have to allow modification).
[1] https://www.infoq.com/news/2015/07/FCC-Blocks-Open-Source
Even if manufacturer provides the code, it can preinstall additional closed source programs. For example, Facebook app or some "telemetry" app that are closed source. My chinese noname phone contained an app that was trying to send my phone number and other identifiers to China as a part of a "sales report" (exact URL was http://bigdata.adfuture.cn /reboot/salesCountInterface.do ). And one can only guess how many data does Facebook collect.
What the end user gets is a phone with a binary blob inside.
I think there should be a strict requirement banning collecting any data without consent from user. No "anonymous" "analytics" and telemetry, no crash reporting, no advertising ids, no checkboxes checked by default. There can be only legal solution to the problem of mass surveillance by software companies. Every byte your device sends to network can end up in the hands of the hackers from developing countries or NSA.
To me, security is not a binary property but rather a sliding scale. WhatsApp say they use end-to-end encryption and they have a strong financial incentive to be telling the truth. No hacker has demonstrated that WhatsApp are lying and the Wikileaks dump suggests the CIA has been unable to intercept messages in transit. Given this information I would rate WhatsApp at least 'reasonably secure'.