Home >companies >news >Google’s Android One bet on Asia

Mumbai: Seldom has a global technology company launched a global product or programme in Asia. On 15 September, at an event that rivalled its annual I/O developer conference in San Francisco, Google Inc. did precisely that when it launched the first family of three Android One phones in India as part of a larger initiative to bring “high-quality smartphones at affordable prices, to as many people as possible", with support for local languages.

There was good reason, one may call it compulsion, too, for Google to do so.

The world of computing is rapidly moving away from desktops and laptops—a segment traditionally dominated by Microsoft Corp.’s Windows operating system (OS)—to mobiles, television and wearables—segments where companies like Google, Samsung Electronics Co. and Apple Inc. hold sway. The trend holds true with personal computing and is gaining traction in the enterprise segment, too, with firms increasingly warming up to the “Bring Your Own Device" (BYOD) trend.

Countries in Asia like India and China are logical choices for any technology company that wants to dominate the new world of computing. Given Google’s history of being cautious in China over censorship issues and the government’s penchant of promoting domestic-run search engine companies like Baidu.com and soso.com, countries like India are the best option.

India is already the second largest mobile market of the world after China with more than 900 million cellphones of which about 130 million are smartphones. It will soon have the second largest Internet population after China, and has a very huge under-25 population that has money to spend on gadgets such as phones and wearables.

Google clearly wants to be there with its Android One programme.

“There are about 1.7 billion PCs (personal computers—desktops and laptops) in the world after about 40 years. Android will get there in a decade," said Sundar Pichai, Google senior vice-president of Android, Chrome and Apps, at Mountain View, California-based Google. The firm plans to expand the Android One programme to Indonesia, the Philippines and South Asia—Bangladesh, Nepal, Pakistan, and Sri Lanka—by the end of the year, with more countries to follow in 2015.

“The only constant thing about computing is change. In the next few years, I think computing will be much more intelligent than it is today, and will help users in more meaningful ways," Pichai said in a recent interview.

Google should know, having a history of out-of-the-box thinking, coupled with good timing and lots of luck.

Google started out as a fledging online search company in 1998, but not many had heard about it till Web portal Yahoo Inc. adopted it as its search engine. Google overtook Yahoo, making the term “Google" synonymous with online search. Sixteen years later, while Yahoo remains a $4.6 billion online search advertising company, the $65 billion Google not only has online search advertising in its portfolio but is also shaping the world of computing.

Google not only has an Android operating system (OS) that dominates the world of cellphones and tablets, but also billions of apps, a Chrome browser for personal computers and a cloud-based OS for laptops, Android Wear for the world of wearables, Google Earth and driverless cars, to name just a few.

Most of these technologies sprang up in the West and were transported to the East, mostly after a lag of a few months.

But newer technologies require a paradigm shift, and with Android One, Google is trying to capture the market for low-cost smartphones, which account for 70-80% of the total smartphone sales in emerging markets like India. Besides, smartphones are giving feature phones a run for their money while outpacing sales growth of desktops and laptops, a category where Microsoft is still the leader with its Windows operating system (OS).

À la carte menu

“By 2017, India will have 500 million Internet users, and Google expects many to access the Internet through smartphones. Within the next couple of years, India will become the second largest Internet user (market) in the world, and most new users will access the Internet on mobiles. And Android is powering much of this growth. In India, over the past 12 months, Android users have more than tripled. With (Android One mobiles), we expect the pace to accelerate," said Pichai.

But what exactly is Android One?

Pichai, 42, a Chennai-born engineer who graduated from the Indian Institute of Technology (IIT), Kharagpur, likens Android One to an a la carte menu of choices.

“We are providing a reference platform, and a menu of choice for our OEM (original equipment manufacturer) partners to choose various tested and pre-qualified components so that it’s easier to build a phone. And with that, they get the peace of mind of software backed by Google, with security and updates," says Pichai.

Priced at 6,399 (about Singapore $132), the Android One phones run the latest version of Android (4.4 KitKat). They will be some of the first phones to get the new Android L release—an update that will offer Google’s new material design, improved battery life, enhanced security features, and smarter notifications.

In terms of hardware, the phones feature front- and rear-facing cameras, 1 GB (gigabyte) of memory, fast quad-core MediaTek processor, long battery life as well as features particularly important to Indians, including dual SIM slots, an FM radio tuner, and a microSD card slot for additional storage. Through Google Play, Android One phones have access to over 1 million apps, while the company’s apps such as Gmail, Google Maps, YouTube, Google Search, and Google Translate will come preloaded on the phones.

Pichai said Google’s partners will have choices of vendors, “but all of them would have been tested by us". With Android One, Google will update the devices “regularly" in a bid to give users a consistent experience, but this will not stop OEMs from customizing—for example, if an OEM wants to provide a good camera app, there’s nothing to stop it from doing so.

Android is already the dominant operating system (OS) globally and in India, too.

The worldwide smartphone market grew 25.3% in the June quarter of 2014 over a year ago, establishing a new single quarter record of 301.3 million shipments, according to data from research firm International Data Corporation (IDC). This is the first time ever quarterly smartphone shipments have surpassed the 300 million unit mark, representing a major milestone for the industry. Android dominated with an 84.7% market share, followed by Apple’s iOS with 11.7%, and Windows Phone’s 2.5%.

The scene is no different in India, with experts estimating the Android OS to have over 85% of the smartphone market share.

In India, Google has tied up with telecom services provider Bharti Airtel Ltd to offer data at lower prices to those who buy Android One phones. With an Airtel SIM card, Android One users will get free updates, and 200 megabytes (MB) per month worth of app downloads from Google Play for the first six months.

Additionally, a data compression feature on Android One’s Chrome browser will help compress the amount of data flowing between the phone and the Internet.

Making computing useful

The initial partnership is with MicromaxInformatics Ltd, Spice Mobiles, a part of Spice Retail Ltd, and Karbonn Mobiles India Pvt. Ltd. Pichai also announced an expanded set of hardware partners for the Android One initiative, including Acer Inc., Alcatel OneTouch, ASUS, HTC Corp., Intex, Lava, Lenovo, Panasonic, and Xolo, as well as chip-maker Qualcomm Inc.

Meanwhile, the Android One programme does not imply Google’s Chrome OS and Android OS will merge, at least not any time soon.

“We invest both in Android and Chrome. Computing is integral to people’s lives. The onus is on us to deliver more useful things to them. We have a huge opportunity across Android to make computing more useful. We are investing in both areas, and will converge organically...we are doing a lot of work on making Android and Chrome integrated with the rest of our offerings. So while there will be a unifying experience across services, Chrome OS and Android One won’t be a single OS since they have unique attributes," said Pichai.

Analysts agree with Google’s overall direction in personal computing.

According to Sanchit Gogia, chief analyst and chief executive of Greyhound Research, Google Android One is going to be a “game changer in India". Google’s goal is to reach the next five billion people in emerging markets and a billion in India, which would give it an edge over Microsoft, Apple and BlackBerry, said Gogia, adding that Android One gives Google tighter control over Google OS which means a standardized user interface.

Support for seven regional languages will give it a further edge over competitors, not only helping consumers use vernacular, but also is likely to help in promoting apps in regional languages, said Gogia.

He pointed out that in India, less than 10% of the population access smartphones, with a price lower that $100. “That said, price alone does not drive demand," said Gogia.

The competition

Gogia believes Google can expect competition “but none has the wherewithal like Google to be as aggressive and invest heavily in the ecosystem—FireFox and Tizen (Samsung’s mobile OS) are competition but far from reaching critical volume".

Firefox, in partnership with Spice and Intex, launched two new smartphones that were priced below 2,300 and aimed at those looking to upgrade from feature phones to smartphones. Microsoft is continuing to launch basic phones in the $30 category as it works on pushing Lumia devices below the $100 mark. Currently, its cheapest smartphone running Windows Phone is the Lumia 530, which costs $144.

Alok Shende, founder and principal analyst of research firm Ascentius Consulting, said: “Android One will lead to standardization, raising the possibilities of a unified experience across Android device manufacturers."

“At a more higher plane, what these recent moves reflect is that Google is cognizant of the fate that has befallen on industry stalwarts such as Nokia and BlackBerry. Just like Google Android, both Nokia and BlackBerry had acquired peak market shares before they started slipping in their respective markets. By constantly nudging itself, Google is pushing itself from the complacency that sets upon players who have gained disproportionate market shares," Shende said.

The flip side of these increasing standardized device offering from Android, he said, will be a greater convergence in the device market and a greater degree of commoditization in the Android world—“a spectra that we last saw in the PC industry".

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