The mobile web giants – Google, Apple and Facebook – may reign supreme over the user experience in the western markets, but they have had far tougher challenges in the countries which are now the world’s two largest mobile user bases, China and India. Google has mounted its latest attempt to assert itself in emerging markets, with a particular focus on India, but with the regulator, TRAI, reaffirming its commitment to the tough net neutrality rules which wrongfooted Facebook Basics, will it have better fortune this time?
In China, Google has been thwarted by restrictions on operating its services there, and by the strength of the homegrown operators and handset makers. Android has considerable market share, but the local MNOs and their smartphone suppliers offer it with their own user interfaces and applications, so there are few opportunities for the search giant to monetize the operating system.
It has expressed determination to control the user experience in India, and other emerging economies such as parts of Africa, more effectively. This is critical – consumption of applications, content and advertising is shifting from PCs to mobile devices everywhere, but for many Indian and African users, the handset is the only internet access device. So for Google – or Facebook – to generate revenues from this burgeoning user base, they have to ensure their apps and adverts are at the heart of the experience.
Facebook took a big step in this direction by acquiring WhatsApp, which is heavily used on handsets in emerging markets, but then stumbled when it introduced Facebook Basics two years ago in India, in partnership with Reliance Communications. Basics is a stripped-down set of applications, including Facebook’s own, which aims to be affordable for the underserved because it is zero-rated (it does not count towards a customer’s data allowance). The aim is to stimulate usage of mobile services among poorer consumers and extend internet access – and Facebook’s apps – to “the next billion”. But this fell foul of Indian net neutrality rules, which bar zero-rating far more clearly than those in many western markets.
Google itself has had even less joy. Its first big push into India came in 2014 with Android One, a reference platform to enable vendors to launch very low cost smartphones. Google provided a complete environment including guaranteed updates for two years and the initiative targeted sub-$100 unsubsidized handsets. This would ensure a bug-free, up-to-date experience for users, to encourage usage, and would enable Google to assert its own services and a unified user interface of its own design.
However, only a year after launch, analysts at CCS Insight were writing in a report that Android One had had “limited direct effect on the market, despite initial enthusiasm for the program. Sales of Android One-based smartphones began more than half a year ago in India but volumes don’t stand out.” Android One is still around – indeed, Chinese handset maker Xiaomi recently launched its first smartphone with the operating system, the Mi A1, but promptly slashed the price.
Now Google has announced Android Oreo Go, another OS targeted at handsets with limited memory (512MB to 1GB), and billed by many as a successor to Android One. This is a version of the new Android 8.1 (codenamed Oreo), but for entry level handsets and emerging markets, and two leading mobile chipset makers, Qualcomm and MediaTek, immediately announced support.
Google is clear that, if it can control the user experience for users of low end devices, at least some of those consumers will upgrade to bigger smartphones and applications over time, and will hopefully take Google’s particular take on Android with them. “Entry level devices are the gateway to the internet for many people, and we want to make sure everyone has a great experience when they use these devices,” said Sameer Samat, VP of product management for Android and Google Play.
All core Google apps, including Maps, YouTube, Assistant and Gmail, are implemented in a low-footprint way in Oreo Go, so they require about 50% less memory, and deliver a better user experience than competitive Android apps, further encouraging users to stay in the Google garden. The smaller apps also ease the burden of OS updates for OEMs and operators.
A core package of bundled apps includes YouTube Go, Maps Go and Google Go – a subset of the search engine that provides access to information by tapping the screen rather than typing. Also included is the Chrome browser, which has been stripped down too. With echoes of technologies developed in the past by Nokia and Opera, all Chrome data and query responses are now compressed server-side before being delivered to the handset to save local resources. Go uses the existing Google Play Store framework to deliver apps, but Google said the store platform has now been optimized for smaller devices.
“We are excited to implement Android Oreo (Go edition) within the Qualcomm Snapdragon mobile platform family as it will enable consumers around the world to experience a more robust operating system for lower cost smartphones,” said Nancy Fares, VP of product management at Qualcomm. “Android Oreo (Go edition) delivers an optimized Android user experience key for emerging regions where lower bill of materials costs are especially attractive, as well as in established regions for prepaid and lifeline uses.”
All this promises to deliver low end smartphones that are nevertheless running the latest release of Android, if in a reduced format. Many vendors work on very affordable Android devices, but these may not deliver a user experience of the quality Google would like to establish as the norm in order to drive usage – or they may have their own ‘skins’ and pre-loaded apps rather than Google’s preferred option. If companies use the open source Android code, without signing up for the Open Handset Alliance, they are not obliged to include Google services in their platforms.
The search giant clearly hopes Oreo Go will make it more attractive for vendors and operators to support a Google-centric environment in order to provide a superior experience for their customers. This builds on other projects on which Google has embarked over the years to extend its influence over mass market handsets. An example is GMS Express, a collaboration with MediaTek to offer an accelerated conformance and compatibility program for Android devices based on MediaTek chips and pre-installed with the core set of Google Mobile Services (GMS), such as Play, Gmail and YouTube.
“With Android Oreo (Go edition), we are partnering with Google to tackle the performance challenges of lower memory phones, improving the user experience of entry level smartphones for consumers in key markets across India, the Middle East and Africa, Latin America and Southeast Asia,” said TL Lee, general manager of MediaTek’s wireless communication business unit.
India is particularly important. It recently overtook the US as the world’s second largest cellphone market after China, and about one million people a week go online for the first time in the country (yet over 70% still have no online or mobile broadband access, so the growth potential is huge). Once connected, Indian users are among the most active in the world on average – last year, they collectively spent 145bn hours on Android devices, according to web analytics firm App Annie.
One issue for these active users, like those anywhere in the world, is that they get through their data allowances too quickly. Facebook Basics aimed to address that, but failed because of neutrality laws, so Google will hope that Oreo Go can also help consumers stretch out their allowances, while avoiding the tactic of zero-rating. Instead, it is providing its core set of applications in such an efficient way that it should incentivize vendors to bundle the apps with their phones, and consumers to use them because they make the monthly data go a lot further.
Google also recently introduced Datally, a data saving application which, when opened, indicates on-screen how much mobile data a subscriber has used on a daily, weekly or monthly basis (many users complain that Indian MNOs do not make it easy for them to track their usage). It also shows how much data each app is using, and enables users to turn off, or block, hungry software.
Another new addition to tempt Indian consumers is a mobile payments app called Tez, and a Hindi version of the voice-controlled Google Assistant – very important in a country where 28% of Google searches are already done by voice, but where most such facilities are still only in English.
Will Oreo Go succeed in India (and Africa) where Android One has largely failed? It will be vital that high growth operator, notably Reliance Jio, get on board as well as the rising tide of local Indian handset makers, such as Karbonn, Micromax and Spice. In the latter group, there is more incentive to adopt Oreo Go than One, because it helps to differentiate the user experience, rather than just enable a low cost handset. At the time Android One launched, the need for Google’s help to drive down device costs was almost over – the CCS Insight report said: “The fading momentum of Android One is an indication of the expanding selection of equally well specified, low cost smartphones and tablets in emerging markets. Hundreds of models are available at $100 or below – a once impossible price band has become very ordinary.”
However, driving down the cost of using popular applications and content remains a pressing issue for OEMs aiming to differentiate their products in a budget-sensitive market, so Oreo Go should appeal to them.
The operators may be more challenging, however. Indian MNOs have been used to controlling the applications and user experience to a greater extent than those in the west, especially Europe, and this will often be their main way to set themselves apart from other operators, and to compete on more than just price (in a country where price wars continue to eat away at the mobile business model and drive consolidation). Reliance Jio, the rapidly growing new entrant, would help to deliver a large number of new customers to Google, with an initial sign-up rate that outdid that of Facebook in its first months. But Jio is looking to expand beyond its initial marketing ploys – free voice and data – and to establish itself as the customer’s main mobile relationship, with a suite of its own-branded apps and services spanning handsets, TVs, cars and smart homes. For instance, its Jio Money app would compete directly with Google’s Tez.
Google has been effective at seizing the consumer brand relationship from operators in the developed markets, and it will aim to do the same in India. If the core Go apps, and the add-ons like Tez, really can deliver a markedly superior experience, while saving users’ data bills, it may succeed, but Jio in particular will not give it an easy ride.