Google is targeting the next billion (and Microsoft) with Android One

At Google’s I/O conference last month, the internet giant unveiled Android One – an initiative that will help connect (at least) the next billion people. This is not a charitable move. Rather, as the number of smartphones globally head to 2-billion in the next 12 months, everyone competing in the space faces the real risk of running out of growth.

For Google, this risk is even more acute. Beyond the close on 2-billion people already using smartphones, the next billion or two are not likely to be using the ‘desktop’ internet in any meaningful way. That makes owning the platform and the experience on the next billion smartphones critical.

Google simply cannot afford to cede this market to anyone else (for much the same reason why it couldn’t afford to cede the smartphone market to anyone and hence bought Android).

Google promises that Android One “will provide smartphones that are high quality, affordable and come with reasonable data plans”. The initiative includes hardware reference platforms (which chipmakers and OEMs in the Android ecosystem have – until now – taken it upon themselves to generate). Its similar to Qualcomm’s reference design programme (although as a chipmaker, they’re the proverbial meat in the sandwich).

This is Google’s targeted emerging markets play

In these markets, four in every five smartphones sold cost under $200. And Mountain View has realised that allowing device makers to ship a three-year-old operating system (2.3 Gingerbread) on entry-level smartphones is a dead end. 99% of those devices aren’t updateable and hundreds of millions of users are stuck on an OS from a long-gone era (BlackBerry’s in a similar situation with OS 7).

The not-so-subtle change with the architecture of the OS means that Google will handle “all software updates automatically”, like it does with its Nexus programme. That solves one hurdle, but the other side of this equation – how users actually get those updates in countries where data remains relatively pricey remains to be solved.

Details on Android One are scant (there’s not even an official website yet). We know that the first devices will be available in India before the end of the year, and that Google is working with regional OEM powerhouses Micromax, Karbonn and Spice. Its Play store auto-installs, which makes this a no-go for the Chinese market.

Fewer than 10% of users in markets like India, sub-Saharan Africa, south-east Asia and South America have smartphones now. The battle has begun to convert these users from feature phones (a market which Nokia and Samsung have long dominated).

Watch out, competitors

Android One is a direct challenge to Microsoft who, with its recently concluded Nokia purchase, have some big decisions to make about the future of its entry-level smart-but-not-quite-smartphone Asha devices as well as Nokia X, which leverages Android. (Microsoft is the only credible OS competitor in this space.) T

he move to drop licence fees for Windows Phone will help drive the prices of those handsets lower too, but in the short term its hard to see anyone but Microsoft shipping significant volumes of Windows devices. Nokia X could be an answer, but given that it’s a fork, Microsoft is competing against Google on services. Will consumers settles for a ‘Play store-less’ experience?

And what of Samsung? Its still caught in the middle, under assault from Apple on the high-end and a flood of (primarily regional) Android competitors on the low-end. Any bets that Samsung somehow becomes part of the Android One programme?