Google Is Claiming Emerging Markets with This Innovative Android Feature

Google has announced the Android one initiative for the emerging markets. The result would be low-cost phones loaded with the latest Android. All in all, Google is set to lead the smartphone growth of the emerging markets.

Jun 30, 2014 at 12:00PM

Google (NASDAQ:GOOG)(NASDAQ:GOOGL) is often criticized for the sub-par user-experience and the security issues of the Android devices. Android fragmentation , i.e. divergent variants of Android, results in the inability of some devices to properly run the apps written in the Android's software development kit, and hence the criticism.

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Source: opensignal.com

Google recently announced the Google-one initiative. The company will be able to control the set of hardware and software standards in the low-end of the smart-phone market. The result would be a less-fragmented Android, enabling a complete Android experience along with a low-level of security threats across devices. This is just the tip of the iceberg though. The detailed implications follow below, but first, what is the Android-one initiative?

The initiative
Google is basically saving OEMs of the headache to design the hardware. Google will design the reference hardware and the OEMs will just manufacture the phone. On the software side, the Android-one smartphones will feature the latest stock Android, and they will also receive timely updates from Google. In a nutshell, Google is planning to control the hardware and the software standards. Google is working with the local Indian manufacturers like Micromax to develop sub-$100 phones in a hope to push the Android-one phones into the emerging Indian market. These phones will feature a 4.5" screen, dual-sim, and an FM radio.

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 Picture credit: BGR


Implications
As Google is designing the hardware, OEMs will save the cost and the time consumed on the hardware design. This will obviously enable them to offer lower-cost smart-phones. But unlike the current cheap Android phones, which run on outdated Android, the Android-one phones will run on the latest Android. The low-cost, latest Android combination is promising for the growth of Google's mobile OS. We already witnessed the success of this combination in the form of the Moto G and the Moto E.

The fragmentation of Android, as we know it, will end. The growth of the Android-one phones will increase the share of the latest Android in the total installed Android-base. The high-end phones already feature the latest Android. Fragmentation comes from the low-end, cheap-devices market. Google-one aims to eliminate the fragmentation from the cheap devices. This will result in a more homogeneous Android across different ends, and as a result, Android will be more secure due to the timeliness of security updates across devices.

Fragmentation also creates problems for the developers. It is quite challenging and time consuming to develop a single app for different variants of Android. These apps usually don't work smoothly across different variants. The end of fragmentation will resolve this problem. The apps will be bug-free on a consistent basis, which was Apple's competitive advantage until now.

As far as Google is concerned, the company will increase its Android footprint in the emerging markets due to the Android-one. Microsoft (NASDAQ:MSFT) is pushing its services through Nokia X in the emerging markets and it is a threat to the footprint of Google's services. Nokia X currently has the advantage of a much better OS experience as compared to the cheap Android phones. However, Google is going to change that with the latest stock Android pre-installed on cheap Android-one devices. The Nokia X threat is neutralized to some extent as a result of the Android-one initiative.

Bottom line
The Android-one initiative is set to kill many birds with one stone. Google's reference design will result in low-cost Android phones. Fragmentation will be minimized resulting in a less vulnerable Android, thus addressing the sole-objection of the Apple fan-boys. The apps will be more consistent and bug-free with Apple's competitive advantage in the app store department being lost. Google also addresses the Nokia X problem with the launch of Android-one, thereby restoring the growth prospects of its services in the emerging markets. All in all, Google's is poised to take the lion's share of "the next billion" smart-phone users.

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Sid A. has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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