Google has launched its Android One initiative in India. The program aims to provide a high level of experience on low-end devices by supplying a standard reference design that will work with the latest version of Android. The initial reference design features a 1.3GHz quad-core MediaTek processor, 1GB of RAM, a 4.5-inch 480x854 display, dual-SIM slots, a microSD slot and FM radio. The first phones are expected to retail for 6399 rupees ($105).
Local Indian brands Micromax, Karbonn and Spice are leading the Android One charge in India, but Google has announced that international brands such as HTC, Lenovo and TCL Alcatel are joining the program alongside chip manufacturer Qualcomm. After India, Android One handsets are set to be released in Indonesia, the Philippines, Pakistan, Sri Lanka, Bangladesh, and Nepal before the end of the year.
Indian operators are reacting with enthusiasm to the launch with Bharti Airtel offering an extra 200MB of data to customers using Android One handsets. Google said it will release an update to the YouTube app in India which would allow users to store videos for offline playback to further help users manage their data spend.
Android One serves several purposes for Google. The stated primary purpose is to improve the performance at the low-end of the market in order to bring smartphones to more people quicker. Google made efforts to make Android run well on low end hardware in the Android 4.4 KitKat update as well. The rationale for this is easy. Google’s revenue stream comes from having as many eyeballs as possible searching and viewing ads as often as possible. Making the smartphone experience more compelling at the low end has a direct benefit to Google’s advertising business.
Google’s emphasis in the lower end is also the stave off competition from Microsoft and Mozilla who are targeting the mid and low end of the smartphone market. Microsoft has the potential to disrupt Google’s plans due to the resources at its disposal, the strength of the Nokia brand in emerging markets and Nokia’s historic industry leading expertise in cost optimization. Microsoft has strategically chosen to fight its smartphone battle in this segment and its most successful Windows Phone smartphones, the Lumia 500 range is in the same price segment as Android One devices.
Qualcomm brought out a Windows Phone reference design earlier in the year and a host of minor players announced Windows Phone powered smartphones at IFA in early September. Android One makes it easier and cheaper for Android OEMs to bring low cost Android smartphones to market while delivering an acceptable customer experience. By removing barriers, it encourages manufacturers to keep using Android over Windows, and will hasten Android adoption by emerging market consumers.
The Android One program should also help address the long standing problem of platform fragmentation. Lower end hardware has tended to run older versions of the Android platform, and manufacturers have not prioritised providing updates for many handsets as well, even if the hardware is capable of supporting the upgrade due to the work required in updating the manufacturer’s customised version of Android. As a result, nearly 1 in 8 Android smartphones globally are still using a version of Android that is over three years old at this point. Less than a quarter use the latest version of Android that was released almost a year ago. For comparison, 92% of iOS devices use iOS 7.
This is a big issue as it massively complicates app development and also prevent Android users from using some popular games or features. Not only will smartphones in the Android One program ship with the latest version of Android, but it will be stock Android i.e. unaltered by the manufacturer. This will greatly help speed up the update process and get more handsets running the latest version of Android quickly. With a more unified ecosystem, app developers would be more likely to develop for Android first, ahead of iOS.
Android One will not necessarily be an instant success in this regard. There are Android handsets available for cheaper than Android One handsets. While most of these will have an inferior experience, being even $10 cheaper on price would make it affordable for millions more. More worrying for Google however would be Xiaomi’s Redmi 1S which has superior hardware to Android One, but is actually cheaper at 5,999 rupees ($98). Xiaomi however is not pursuing the same business model as other handset manufacturers which should prevent other manufacturers from being able to reproduce such a high quality handset at that price.
Android One will also serve to strengthen Google’s brand in emerging markets. The lack of manufacturer software customisation will simultaneously hinder the ability of manufacturers to build their own brands. Nonetheless, IHS expects many smaller, local players to join the program in an effort to steal a market share from the likes of Samsung. We are already seeing strong local players emerge in China, India, and Russia and this trend should proliferate to more markets with Android One. Intense competition between Android manufacturers with weak brands is good for Google as it reduces the risk of a manufacturer being able to ‘fork’ Android and cut out Google.