Google's Mobile Project in India Aims to Solve the China Problem

Photographer: David Paul Morris/Bloomberg

Sundar Pichai, senior vice president of Android, Chrome and Apps for Google Inc., speaks during the Google I/O Annual Developers Conference in San Francisco, California, U.S., on Wednesday, June 25, 2014. Close

Sundar Pichai, senior vice president of Android, Chrome and Apps for Google Inc.,... Read More

Close
Open
Photographer: David Paul Morris/Bloomberg

Sundar Pichai, senior vice president of Android, Chrome and Apps for Google Inc., speaks during the Google I/O Annual Developers Conference in San Francisco, California, U.S., on Wednesday, June 25, 2014.

Sundar Pichai kicked off Google’s rapid-fire announcements at its annual conference yesterday with one that hits close to home. The Android chief, a native of India, lamented the slow adoption of smartphones there and said Google would embark on an initiative to help the country along.

Pichai said the project, called Android One, is designed to help local hardware manufacturers build better, cheaper smartphones that’ll enable more people in emerging markets to afford to participate in the information revolution. Here’s what it's really about: Google doesn’t want to lose its grip on Android like it has in China.

One piece of the Android One plan — the part Pichai most strongly emphasized during the presentation — is to compile up-to-date lists of tech specs for affordable smartphones. This should eliminate the need for smaller, low-margin device makers to pour money into designing a new smartphone from scratch every nine months to keep up with the industry’s pace, Pichai said. Google is working with Micromax, Karbonn and Spice in India on the first Android One products to debut in the fall. Pichai said he’s been testing a Micromax phone designed as part of the program, which has a 4.5-inch screen and features important to Indians, such as dual SIM cards, FM radio and a swappable memory card for less than $100.

"I've been using this phone for a while, and it is really good,” Pichai said on stage. "When I go back home to India and other countries like that, it is exciting to see the impact phones have on people's lives, but it's disappointing that only less than 10 percent of the population has access to smartphones. We want to change that."

Surely, Google would also like to minimize the chances of having to compete with software makers in each country on Android, which the Silicon Valley giant gives away to device makers. So Android One phones will run on the base version of the mobile operating system without modifications. The phone manufacturer and the customer’s mobile carrier will be able to set devices to automatically download preferred apps, such as those popular locally, through Google’s Play Store, and to keep the system constantly updated.

China is a model for what can go wrong when Google doesn't exert some control over what companies can do with Android. Google doesn’t offer an app store in China because it avoids doing business in the communist country. So many competitors have stepped up to fill in the holes. Samsung Electronics, Xiaomi and other phone makers have their own app stores in China and often modify the versions of Android on their devices to promote their offerings. Chinese Android users make a habit of installing various app markets to access games and other software that are exclusive to each one, said Jenny Lee, a managing partner at venture firm GGV Capital in Shanghai.

Software downloads comprise a big business that Google has ceded in China, the world's largest mobile market. Chinese search giant Baidu bought 91 Wireless the country's most popular third-party store, for $1.9 billion last year. Alibaba Group said this month that it will acquire the shares it doesn’t already own in UCWeb, which also operates an app store, and — in a nice bit of one-upmanship — that the valuation is bigger than 91 Wireless. Sky-Mobi, a publicly traded app store operator in China, gets promotional help from the the largest mobile carriers, and that has helped Michael Song, its chief executive officer, to become a “local king,” he said in a recent interview.

Google’s hold over the Android software market in India may be slipping, too. The Google Play Store faces challenges from 1Mobile Market and others that cozy up to local developers. Microsoft’s Nokia X smartphone, which runs a modified version of Android without Google’s apps, frequently appears on top-seller lists at Flipkart and Snapdeal, India’s largest online retailers.

"Android One is ostensibly about expanding access to smartphones, but is really about increased Google control,” tweeted Jan Dawson, an analyst at Jackdaw Research.

India is a logical place to start the Android One project. True, Pichai probably has a soft spot for the country, having grown up in the southern coastal city of Chennai. (He’s the subject of Bloomberg Businessweek's cover story.) But more important, it’s one of the fastest-growing smartphone markets in the world. Smartphone penetration is at just 10 percent there, and shipments were up 186 percent in the first quarter compared with the same period last year, according to research firm IDC. Meanwhile, China’s growth was 31 percent as the country begins to approach saturation.

“We can bring high-quality, affordable smartphones so that we can get the next billion people access to these devices,” Pichai said at the conference yesterday. "We are going to be launching this around the world, but we start this journey in India."

Don’t expect Android One to come to China anytime soon. There’s only room for one king.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.