Is China About to Dismantle Android?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The Chinese government hasn't been so keen on Google (NASDAQ: GOOGL  ) these days. The time, China has grown concerned that Android commands roughly two-thirds of the Chinese smartphone market. Last Friday, China's Ministry of Industry released a white paper saying how China has grown far too dependent on Android and how Google maintains too much control of the road map, despite it being open-source software. The white paper goes as far as to claim that Google discriminates against Chinese companies by delaying the sharing of codes and uses contracts to restrain the development of Chinese mobile devices. Given China's strong history of protectionism, it's easy to see how this could become a bit of a problem for Google in the world's largest smartphone market.

Geek Park
Google Chairman Eric Schmidt recently visited Bejing to speak in front of 3,000 developers in an area of the city that's known to locals as "Geek Park," which is more or less China's attempt at creating its own version of Silicon Valley. Schmidt's agenda was to persuade local Chinese developers to write applications for the Android platform and to educate them about Google's larger mobile strategy. Despite China's reservations about Google, the company clearly wants more Chinese developer support since developers could become Google's ticket to increased Chinese monetization.

Big motivation
Beneath the surface, there's a big motivator of why Google needs Chinese developers on its side. When the company abandoned its mainland Chinese search business in 2010, many Chinese smartphone OEMs ditched Google Search for Baidu as the default search engine on their Android devices. As a result, Google has been largely unable to capitalize on the fact that Android has been wildly popular in China since search remains Google's bread-and-butter business.

Clipped wings
Although China represents a tremendous smartphone opportunity for Google, it remains hindered without the help of Google Search on its side. This challenge has forced Google to get creative by enlisting the help of Chinese developers to drive future monetization to the Android platform. Sure, it's a seemingly backdoor approach, which is fine and dandy, unless the Chinese government decides to proceed against Android. Given Google's history of bad breaks, I wouldn't be putting too much emphasis on Android's Chinese business prospects right now.

It's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2299539, ~/Articles/ArticleHandler.aspx, 10/28/2016 12:35:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,240.25 70.57 0.39%
S&P 500 2,139.78 6.74 0.32%
NASD 5,226.96 10.98 0.21%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 12:19 PM
GOOGL $834.38 Up +17.03 +2.08%
Alphabet (A shares… CAPS Rating: *****
BIDU $180.33 Up +5.23 +2.99%
Baidu CAPS Rating: *****