Amid the noise from the relentless stream of expensive flagship smartphones that have been launched in recent weeks by Apple and others, Google has been quietly setting its sights on a much larger market of consumers who have yet to buy their first smartphone.
The US technology group will this week set out to establish the smartphone standard for the next billion mobile phone users in emerging markets by launching a low-cost platform in partnership with local manufacturers.
In New Delhi on Monday, Google will reveal the first handsets to be produced as part of the initiative that has become a personal project for Sundar Pichai, the Chennai-born boss of its operating system Android.
The launch is important for the company as its seeks to supplant brands such as Nokia in emerging markets.
This market is much less profitable in terms of the margin on the average selling price of the devices, but having the ears and eyes of half the world has its own rewards for Google, which has embarked on a mission to connect the next billion customers to the internet through any means possible. That means another billion customers for its search, maps, YouTube and myriad other services.
GSMA, the mobile-industry trade body, last week forecast that the number of smartphone connections worldwide will reach 6bn by 2020, from 2bn at present, with four-fifths being used in developing markets.
Nokia once dominated the industry with close to half of the mobile market but its gradual demise has coincided with the rise of Android, which now runs on more than 70 per cent of the world’s smartphones.
But unlike Nokia’s close control of its hardware and software, the open nature of the Android system has allowed a proliferation of handset makers to modify the operating system as they see fit.
“Android One is key for Google in order to drive a consistent user experience at sub-$100 price points,” says Geoff Blaber, analyst at CCS Insight.
“Android’s success in entry-level smartphones has been driven by older versions of Android or Android devices without Google services. If Android is to drive service usage and advertising revenue for Google, it must reduce version fragmentation and increase consistency across the full range of price tiers.”
Mr Blaber adds that Android One stands to make the operating system significantly more competitive in markets such as India. “This stands to further strengthen Android’s eye-watering scale advantage in emerging markets.”
The project is of personal and professional significance to Mr Pichai, who has masterminded the Android One project. The India-born executive took the helm at Google’s mobile software unit in 2003, replacing Andy Rubin, the man who transformed Android from a small project into the world’s most popular software for smartphones during his 10 years in charge.
“Sundar hasn’t really sought out the revolutionary changes to Android,” says Mark Hung, analyst at Gartner. “He’s really been bringing the platform to a maturity level that can take on its competitors.
Mr Pichai’s elevation at Google has led industry insiders to describe him as a potential future chief executive. They say his personal background made him acutely aware of the need to spread mobile and internet services to the emerging markets.
Those familiar with Google’s thinking say that it is worried that standards have slipped within the market, leading to substandard experiences in emerging markets for people using smartphones for the first time.
The US technology group is working with local manufacturers such as Micromax, the Indian smartphone maker, according to people familiar with the situation. Chipmakers such as MediaTek have also been engaged to produce the phones, they say.
“India is the first target market and other countries will swiftly follow,” says one person familiar with the plans. Other emerging markets in Asia, Africa and Latin America are being considered, the person adds.
One market that Android One is not expected to enter soon is China, according to people familiar with the matter. Google has a troubled relationship with Chinese authorities, with the company pulling its search offering out of the country after deciding to stop co-operating with the country’s censors.
Devices are expected to feature dual-SIM slots as well as FM radios and reasonable quality cameras at prices under $100.
Google will have much greater control over the software used by the devices, according to those familiar with the plans, including the regular updates that will be required over time.
Google expects the smartphone to be the first point of contact with the internet.
“There are a lot of versions of cheap Android phones that are not good quality,” says one person. “Google wants to make sure that there is a consistent experience across its software and hardware on Android.”
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