When Sundar Pichai, senior vice-president of Google Inc., announced the launch of Android One phones in India last September, analysts were expecting fierce competition in the low-cost, or below Rs.10,000, smartphone market.
However, despite the fact that Google’s Android operating system (OS) runs on about 80% of the world’s phones, including those in India, the company’s handset partners have together managed to sell less than a million Android One devices in India till date.
Around 8.5 million Android phones were shipped to India from September 2014 till last month, according to the May 2015 Counterpoint Research Market Monitor. Research firm Convergence Catalyst pegged the total number of Android One handsets sold in India since its launch nine months ago at less than a million.
“And they form 2% to 2.5% of the total smartphones sold in that timeline, and 8% to 10% of the about $100 smartphone segment sales,” saidJayanth Kolla, research firm Convergence Catalyst’s founder and partner. Shipment numbers are typically 20-25% higher than actual sales numbers.
Caesar Sengupta, vice-president of product management and product strategy for Android One, Android for Work and Google Chromebooks, insists that the sales of Android One phones “are not disappointing”, since his company has a “broader goal of bringing the next billion people online”.
“We are happy with progress of Android One in India because we tend to think of the program from a platform perspective rather than as an OEM (original equipment manufacturer), which is all about the number of devices,” said Sengupta in a phone interview from Singapore on Friday.
“Last year alone, India saw the launch of 1,200 mobile phones at different price points. What we have achieved, from the Android perspective, is that we have managed to move the industry towards promising and delivering the latest OS updates to the end-user. Android One from that perspective has played the role of a catalyst in the market and we are very happy about that,” he said.
One reason for the slow pickup in sales, say analysts, was the initial decision to restrict the sale of Android One phones to just three handset makers: Micromax Informatics Ltd, Karbonn Mobiles, a joint venture between New Delhi-based Jaina Group and Bengaluru- based UTL Group, and Spice Mobility Ltd.
Of these handset makers, only one figures in the list of top three smartphone handset vendors in the Indian market. According to Counterpoint Research figures for the December quarter of 2014, total smartphone shipments to India stood close to 22 million with Samsung Electronics Co. Ltd leading the overall smartphone market with a 27.4% share, followed by Micromax at 19.5% and Intex Technologies (India) Ltdwith 6.5%.
Even in the overall Indian feature phone market, Samsung led the pack with a 16.1% share, followed by Micromax’s 14.4% and Microsoft’s (Lumia) 11% in the December quarter.
Sengupta, on his part, insisted that Android One makes it easier for handset makers to build a phone and get seamless security upgrades and software updates.
“We successfully delivered on our promise of ‘Always the latest’, and rolled out Lollipop 5.1 (the latest version of Android) at high quality and are now rolling out the next version, Lollipop 5.1.1,” said Sengupta, claiming that Android One devices have “seen the lowest rate of return in the market”.
In the next two years, he added, Google expects to see around 1.2 billion smartphone sales in just six countries— India, Nepal, Bangladesh, Sri Lanka, Indonesia and the Philippines—where Android One has been launched.
Android One phones have now been launched in Turkey, too, and “we are now available in seven countries and have around 20 OEM (original equipment manufacturer) partners”. India, too, “will have new phones from new OEMs and new countries coming up soon. We’ll announce when we’re ready. Lava is the new partner in India”, said Sengputa.
Lava, according to Counterpoint Research, had a 7.4% share of the overall phone market, and 5.1% of the smartphone market, in the December quarter.
According to Kolla, Android One “was and is a great product strategy, but where it faltered (so far) was in formulating and executing a robust go-to-market strategy. Although Google dictated the hardware, software features and specifications of the device, the onus of sales was on its Indian OEM partners…”
Kolla explained that all of these handset makers had their own devices in a similar price range (less than Rs.7,000). Besides, he said, most handset makers were only experimenting with online sales of smartphones at the time of Android One device launch, hence the exclusively online launch for a certain period of time did not go down well with traditional offline distribution channel partners of the handset makers.
Google, meanwhile, is “thinking carefully about how we evolve our products and our platforms to address the particular needs of these next billion users”, said Sengupta. He cited the launches of Search Lite, YouTube Offline and Maps Offline as cases in point “to make it easy for users to use the Internet with slower data speeds and high costs”.
Google also has Chromebooks as part of its strategy to connect the next billion. These are low-powered laptops meant primarily for web browsing, and equipped with the Chrome browser and Chrome OS.
It is a rapidly-growing but nascent category in the personal computer market. According to an 11 August 2014, report by research firm Gartner Inc., sales of chromebooks are set to nearly triple to reach 14.4 million units by 2017 from 5.2 million units in 2014—itself a 79% increase from 2013 figures.
“Schools have started embracing Chromebooks heavily in the US and in countries such as Malaysia. We have started seeing that trend in India, too. It’s still early days for this category, but we are happy with the progress,” said Sengupta.
But why does Google need two operating systems—Android OS and Chrome OS—that serve similar interests? Why not merge them?
“We now have Android apps running on Chromebooks. But we never talk about stuff before we have done it (referring to the likely merging of the two operating systems),” said Sengupta. “We tend to look at it more from the point of end-user experiences. For instance, you will notice that the look and feel of Chromebooks and Android devices are more and more similar, making it easier for people to use them. We are also working on data and apps to make that experience smooth, since that is what users care about.”