Google (GOOGL, Financial) has send an invite that it will make “an exciting announcement” on September 12. Sources have confirmed that it would be the inaugural of Android One smartphone in India priced around $100. As the company is taking all steps to create a strong footprint in the emerging markets, India is the hot bed for investment having a booming multi-billion dollar smart devices market operating at the core. And this announcement about the initial launch has put the biggest rival Samsung (SSNLF, Financial) into trouble which has been mainly offering premium priced smartphones to the Indian buyers. So, will this war between the two market bellwethers intensify after September 12. Let’s check it out.
Google’s approach to win the battle
India is a land of price-conscious smartphone buyers wanting more by spending less… To entice smartphone buyers in India, Google has taken up a new initiative of collaborating with certain smartphone manufacturers in Indian soil. As per sources, Micromax (MICRO, Financial), Karbonn Mobiles and Spice are the first mobile manufacturing companies that are signing up with Google for Android One that even helps them specifying key hardware parts.
Google’s primary aim behind this enterprising decision is to improve the quality of the operating system of smartphones that cater extensively to the demand of low-end Android phones in India. Currently most of the Android low-end smartphones run on customised version of Android operating system which makes the apps susceptible to glitches. Thus, Google wants to bring in this massive transformation with the interest of winning a greater market pie in India. So now, a mobile buyer can opt for a cheaper smartphone easily as Google’s Android one smartphone would offer a reasonable sticker price. So this venture is against the several premium priced smartphones available in a market where more than 80 smartphone companies operate.
Google in a win-win situation
With the arrival of Xiomi phones and the announcement of new smartphones like the Motorola OnePlus in India, a mid-range revolution is being witnessed in the past few months. As the growth of the smartphone market in India is pegged to sub-$200 devices, Google is leaving almost no stone unturned to bring more smartphone users into the Android fold.
India presently offers huge opportunity to smartphone manufacturers as smartphones are yet to gain market popularity. This is well understood through the fact that while there were 910 mobile subscriptions by the first half of the year, merely 111 smartphones were actually shipped. Keeping such facts in mind, Google is reportedly planning to spend nearly $16,592,709.49 on advertising and marketing for the Android one smartphone venture.
If this venture turns into a success and there is a pull seen for Android One smartphone, Google could stand to gain from increased access to the Internet and its suite of products. Industry sources opine that this venture will help Google expand its revenue in several ways, as the Android One phones would not come with heavy customization that Samsung and other phone makers using Android OS provide.
That will translate into more default settings for Google’s products in the emerging markets and less competition from rival search engines and other available app stores.
Samsung feeling the heat
As per U.K. analyst at Strategy Analytics: “A major threat for Samsung is that Android One will accelerate the race to the bottom on smartphone pricing.” If high-quality low cost smartphones start selling like hot pancakes in India, it will exert intense pressure on Samsung which is the number one selling brand till date in the smartphone segment. But its market grip is slowly fading away and is reflected in the drop of its market share to 25.3% in the second quarter from 33.3% in the first quarter of the year. Meanwhile, Micromax’s share has jumped to 19.1% from 16.7% in the first quarter.
The level of competition from Android One and local players using this system will depend on the prices, as Samsung might be heavily hit from all ends by the low range mobiles offering similar features as being offered by it in the premium range.
Final word
Nevertheless, Google first wants to bring the Android One to the emerging markets and then launch it globally. It’s well prepared against its major rival, Samsung and also poses a threat to other smartphone operators in India. How Samsung and other smartphone makers will react to Google’s Android One is yet to be analysed, but as of now it’s a war waging between Google and Samsung in the Indian smartphone arena.
