Google Inc's partnership with three Indian phone makers is set to rev up
fast-growing demand for lower priced smartphones, and spell more trouble
for Samsung Electronics which is rapidly losing share in emerging markets.
Micromax Infomatics Ltd, Karbonn Mobiles and Spice Group are the first
phone manufacturers to sign up for Google's Android One initiative,
which provides specifications for key hardware parts. Some of the new
phones are due to hit the market this month.
The aim is a vast improvement in quality that would lead to a surge in
demand for low-end Android phones. Currently many cheap emerging market
smartphones run different and somewhat customised versions of the
Android operating system, which along with the many variations in
hardware make apps on those phones prone to glitches.
While Google plans to push Android One globally, India, the world's
third-biggest and fastest growing smartphone market, offers fertile
ground for immediate results. Many Indians are buying a smartphone for
the first time and a strong reception for Android One could promote
common standards and consolidation in a market where more than 80
smartphone companies operate.
But any boom for higher-quality low-cost smartphones in India and other
price conscious markets has the potential to exert intense pricing
pressure on Samsung. The South Korean firm uses a customised version of
the Android operating system but focuses on higher-margin offerings like
its Galaxy S series.
"A major threat for Samsung is that Android One will accelerate the race
to the bottom on smartphone pricing," said Neil Mawston, a UK-based
analyst at Strategy Analytics.
"Android One now makes Google a foe, not just a friend, for Samsung."
A major strategy rethink for low to mid-tier products is now in order
for the world's biggest phone maker and top seller in India, analysts
say, particularly as Samsung is also losing share to Apple Inc at the