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Yandex to Replace Google Services on Two Android Smartphones

Yandex NV (YNDX), Russia’s biggest search-engine company, said two smartphone makers will sell Android phones with its services pre-installed, a boon as it seeks to challenge Google Inc. (GOOG) on mobile devices.

Yandex’s browser, maps, search, cloud storage and store with 100,000 applications will be the default options on two phones, made by Huawei Technologies Co. and ZAO Explay, that will go on sale in Russia in March, Alexander Zverev, head of mobile ecosystems at Moscow-based Yandex, said in an interview.

The company is seeking to maintain its market share in Russia as local users switch to surfing the Web on mobile devices, with Android smartphones dominating. Yandex is joining other companies that are building their own services on top of Google’s Android, including Amazon.com Inc. and Nokia Oyj. (NOK1V)

“When smartphone manufacturers use the Android platform, they normally have to stick to Google’s services ranging from search to application store,” Zverev said. “We are offering a full-fledged alternative here, and we are among a few companies in the world capable of doing this.”

Yandex had 62 percent of the Russian search market in January compared with Google’s 27 percent, according to Moscow-based researcher LiveInternet.ru. Yandex also says it had at least 52 percent market share of searches on Android phones in Russia.

“We’d like to boost our market share on Android phones and benefit from growing mobile advertising,” Zverev said. Yandex also has over 90 percent market share on smartphones running Microsoft Corp.’s (MSFT) Windows Phone system in Russia, he said.

Barcelona Congress

Russian sales of Android phones doubled last year to 14.1 million units, or almost 80 percent of the country’s smartphone market, according to research firm IDC. Explay and Huawei sold 828,000 and 212,000 smartphones respectively, accounting for 5.9 percent of the total market, IDC data shows.

Shares of Yandex rose 2.3 percent to $41.21 in New York yesterday. The stock has declined 4.5 percent this year after doubling in 2013.

The company plans to showcase its mobile services at the Mobile World Congress next week in Barcelona. Later this year, it plans to have its services pre-installed on Android tablets in Russia, Yandex executives told reporters in Moscow today.

Amazon (AMZN), the world’s largest online retailer, uses its own services, such as its app store, in its Kindle devices, which run on a version of Android. Nokia, whose mobile-phone unit is set to become part of Microsoft Corp., plans to introduce Android smartphones that have access to Nokia’s services including its app store, people familiar with the matter said this month.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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