Google finally launched “Android One” program aimed at the next “5 billion” people, starting with India. For those who are unaware, Android One is a program where Google will work with their partners (OEMs and chip manufacturers) to ensure a seamless experience of Android. Google will lay down the smartphone specifications that OEMs will have to abide by. OEMs won’t be able to customize Android but will be able to add apps of their own. The pricing will be around $100 (INR 6,000 – 6,500). Smartphones under Android One program will receive latest updates of Android almost as soon as it is released for about two years. The objective of the program is to enable consumers of developing nations to have access to smartphones and seamless internet (Read: 3G and above) at affordable rates. Under the “Android One” program, Google has already launched three smartphones – one each from Karbonn, Micromax and Spice. There are many more in the pipeline from other OEMs. This new development will stir up the Indian smartphone market for sure. A lot of stakeholders will be affected both positively and negatively. Some will see a splurge in revenues and some will have to innovate to keep up with the market growth. Some will turn their focus from other OS whereas some will think of developing their own OS. So, who stands to gain and what’s in it for the following stakeholders?[sociallocker]
Google – This is Google’s attempt to completely dominate the OS market. They are already dominating the market with roughly 3/4th market share. Through Android One, Google will address three areas of concern – fragmentation of OS, domination of partners who are ironically also their competitors and optimum user experience. Today, there are Android phones running from version 2.x to 4.4. The user experience part is controlled by OEMs who customize the OS based on their requirements thereby disrupting the “Pure Android” experience. Android has conquered the smartphone OS market largely due to a complex partner & competitor in Samsung. Android One is here to ensure the power shift in the smartphone market will move more towards Google.
Consumer – For those who want to finally make the switch from a feature phone to a smartphone, Android One is probably the best option of all. The smartphones won’t burn their pockets and they will be able to experience the best of Android at all times. Consumers always in the lookout for bargain will side with Android One. On the flip side, however, the lack of differentiation in the product will force the existing, and in some cases – new, users to move on to smartphones with better specifications at roughly the same price. Also, any smartphone user will aspire to have a better smartphone once the old one has lived past his shelf-life. Once this phase starts to creep in, Android One will have to devise a better succession plan for such users so that they stick around. According to Google, they will be launching more smartphones with different (and supposedly better) specs, sizes and price-points. So, till the time new smartphones with different specs are launched, lack of differentiation will remain a blip in the program.
Original Equipment Manufacturers – The growth in the smartphone market has helped in the mushrooming of new OEMs in the Indian Market. Players like Micromax and Karbonn are competing fiercely with the global leaders and providing smartphones with similar specs at lower price points. They will now have a strong ally in Google. Under this program, Google needs them as much as they need Google. The new OEMs struggling to get a foothold in this market will be more than happy to be a part of Android One as it will support their Go-To-Market strategies. But the complexity of such an alliance is that there will be multiple Android One smartphones with same specs and the only visible differentiation being the brand name of the OEMs. The OEMs will look to spice up their visual appearance of their smartphones and provide strong back-end customer support. How far they will succeed in differentiating their offering is anybody’s guess.
Samsung – In more ways than one, the launch of Android One is in direct competition to Samsung and their plan to launch their own OS – Tizen (erstwhile Bada). Samsung was intending to launch Tizen powered smartphones (including future Galaxy series) across different price points. Once this happens, Samsung’s dependence on Android will reduce. Android One could beGoogle’s pre-emptive response to Samsung’s development. Google and Samsung admit they are strategic partners and will remain so in the short to medium term but an underlying competition between them cannot be ignored. Another point to note is the future plan of both Google and Samsung. Both intend to enter your living room with their smart devices powered by their respective OS. Android One launch puts Samsung on the back foot till they respond with an offering of their own. And they have to be quick in such a dynamic market.
Mobile banking / E-tailers – Google described connectivity as one of the challenges. By that, they mean the smartphone should have seamless and high speed internet connectivity. Google is an internet-based company and having connectivity is of utmost importance to them. Supporting devices that enable high speed internet will not only be beneficial to Google but also enable other unrelated players like banks and online retailers (e-tailers). Once the shift is made from feature phones to smartphones, the users will start using their smart devices for banking and shopping purposes – albeit gradually. Banks and online retailers will only stand to gain from this development.
Android One may not be the “game-changer’” in the real sense of the term. It is a market “disruptor” at best. We can expect a plethora of similar featured smartphones in the near future with little differentiation. Top OEMs like Samsung, who have not joined the program, will have to retaliate by launching their own set of devices directly in competition with Android One. Tizen OS may be launched sooner than anticipated. Other OS players like the recently launched Firefox OS will have a huge problem on their hands to compete with an efficient and cost-effective OS like Android.Android has ensured that the heart of the smartphone is the OS and not necessarily the hardware. Guess it’s the whole hardware v/s software battle all over again since the epic Steve Jobs – Bill Gates era.[/sociallocker]