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Android One: Google’s masterplan for the next billion users

Google have unveiled their first Android One device, offering stock Android at budget prices for Indian users. If it’s successful, the Android One line will be rolled out in Indonesia, the Phillipines, Pakistan, Nepal, Sri Lanka and Bangladesh before the end of 2014. We ask the experts if Google can really dominate the growing market in Asia and beyond and what challenges they will face.

While everyone expected an Android L announcement at this year’s Google I/O,o ne of the most crucial initiatives for Google’s mobile future was easily missed, as it wasn’t directly aimed at the US and European markets. Android One, a new hardware and software spec for low-end smartphones in developing nations, is intended to help Google expand the reach of its mobile OS in countries like India, China and beyond.

What exactly is it, then? Google is using the term “Android One” to refer to a set of hardware standards for smartphone manufacturers, standards which it hopes will speed up the process of developing budget handsets in emerging markets. Google is also providing the stock Android package – the same one used on the Nexus and Google Play Edition devices – then working with OEMs and carriers to give new customers the handsets and data packages they need. Essentially, Google gives manufacturers everything they need except the raw materials to build the product.

Sundar Pichai, the Senior VP for Android at Google, announced Android One at Google I/O 2014
Sundar Pichai, the Senior VP for Android at Google, announced Android One at Google I/O 2014

You can think of it as a Nexus programme for the developing world, with a lower set of hardware specifications, special features (such as dual SIM capabilities) that are popular in these markets, and more control from Google over how the overall package is delivered.
In countries like India, where the Android One scheme is starting, the mobile landscape looks a lot different. Most users are still on budget feature phones, connectivity is patchy, and handsets often double as radios or document scanners in the absence of other technology. Smartphone use is expected to explode in India over the next year or two, which is why Google is making its move now, with Micromax, Karbonn and Spice as its first hardware partners.

On stage at Google I/O in San Francisco, Google Senior Vice President Sundar Pichai showed off a Micromax Android One device that cost around $100. Featuring the FM radio and removable SD cards demanded by the Indian market, it will run stock Android and have full access to the Google Play store, an attempt to stay on top of any potential fragmentation. “I’m used to cutting-edge phones, and I’ve been using this phone for a while and it is really good,” Pichai told the audience.

“At scale we can bring high-quality, affordable smartphones [to the market],” Pichai added. “So we can get the next billion people access to these devices, and we can’t wait to see the impact that it’s going to have. If you look at all the OEMs in these countries, each of them has to reinvent the wheel, and in the fast-paced mobile industry they have to build a new smartphone within nine months. So we want to pool resources and help everyone.”

Google isn’t the only company interested in reaching this potentially lucrative market, and it’s unlikely to have everything its own way – it faces a particularly tough fight in China, where OEMs circumvent Google Play completely, developing their own versions of Android and customised budget hardware designs that can be produced at scale for as little as $40.

The Chinese problem

Analysts believe it’s a move that Google had to make, but one which isn’t necessarily going to be successful. “With Android One, [Indian OEMs] are buying into a network of component suppliers and manufacturers that have scale and scope to manufacture their latest designs at a shorter time,” said Wayne Lam, Senior Telecom Electronics Analyst at IHS. It will be less appealing to Chinese OEMs, he told us, as these manufacturers don’t make use of Google Play and already have low-cost hardware reference points to rely on. “Chinese OEMs continue to rely on 256MB versions running Gingerbread and are able to reach new lows in price,” said Lam.

“I see the Android One program as more a way to contain the hardware fragmentation within the industry rather than offering something new in developing market smartphone design and manufacturing,” added Lam when we spoke to him. “The fragmentation issue is clear when still a significant amount of Android devices still run three or four year old versions of Android. The Android One program, if adopted widely will move more phone designs to KitKat. However, that would mean a minimum set of hardware requirements that some low-cost Chinese OEMs are unwilling to take.”
We also got the thoughts of Rob Enderle, veteran technology analyst at the Enderle Group. He sees this as a move from Google to become more Apple-like – in controlling the hardware and software ecosystem – without taking on the risk of actually manufacturing devices itself.

“Since most of the profits for Android phones flow directly to Google through advertising this is an attempt to get most of the profits while passing most of the risks to others,” Enderle told us. That might not be a scenario that the hardware OEMs are particularly happy with, as they carry the can if these phones flop – Google can simply move on somewhere else.

“I think the problem will be this split of profits and risk,” says Enderle. “Not all of the phones will be successful, and Google typically doesn’t do much marketing, putting even more pressure on the hardware OEMs. Their existing OEMs are already complaining about Google not listening to them, and the fact that not even Samsung is doing that well financially at the moment… [shows] these low margin phones could easily be massively unprofitable. If that occurs, this effort will force a number of companies out of the segment and Google back into phone manufacturing.”

India infographic

The competition

As you might expect, other companies besides Google have their eyes on the relatively untapped markets of Asia. Though Microsoft hae discontinued their line of Android-powered Nokia X phones, their CEO Satya Nadella  has already confirmed they will be reusing the same designs to produce a new range of “low-cost Lumia” Windows Phones, most likely targetting the emerging markets. Also worth considering are the handsets running Mozilla’s Firefox OS from the likes of
Alcatel and LG, though these are mostly sold in South America at the moment.

“Comparing Android One to Nokia X and Firefox OS platforms, it’s clear that more flexible platforms will likely achieve lower absolute cost of hardware,”  Lam told us, though he did emphasise the superior user experience and app ecosystem offered by Android KitKat. Google can offer a more mature and complete software package than either Nokia’s brand of Android or the Firefox OS being developed by Mozilla.

“Nokia X is more similar to Apple, and Firefox is more like Android used to be with fewer controls and more design freedom,” adds Rob Enderle. “If Android One fails, which it could given the financial pressures on the OEMs, then these two alternative platforms would benefit strongly from the failure.”

This has been on Google’s mind for some time – note the reduced hardware system requirements for Android KitKat, for example – and now it’s giving OEMs even more guidance when it comes to putting together budget smartphones that can allow KitKat to shine as well as getting millions more users into the Google Play ecosystem. It’s important not to forget the stock Android and automatic updates provided by the Android One project, which are just as important as the hardware framework. Google has said local carriers will be able to install additional applications relevant to their market.

Whether or not the vision set out by Sundar Pichai is ever fully realised, the Asia-Pacific market is going to be increasingly important for Apple, Google, Microsoft and the hardware companies. Google wants billions more users around the world using smartphones; and it wants those smartphones to be running stock versions of Android. Welcome to the Android One project.

This article first appeared in Android Magazine issue 41. Pick up Android Magazine in all good shops and as a digital download for the latest Android news, reviews, tutorials, and expert opinion.