Google Inc. (NASDAQ: GOOG) is making an even larger push into emerging markets. Its new Android One initiative was unveiled on Wednesday, and the goal is significant: getting cheap smartphones in the hands of consumers in emerging and developing market economies.
Where this gets hard to see a true win is in the goal of getting these smartphones made and sold at levels under $100. In the United States, it may not seem like a huge deal because all the major carriers subsidize your smartphones due to those contracts. That is not generally the case once you leave the English-speaking parts of North America.
Apple Inc. (NASDAQ: AAPL) may be the ultimate target here. With Apple soon to be releasing the iPhone 6, Google may be taking the step of “the phone for the rest of the world” rather than the high-cost iPhone. As a reminder, most of the developing market Internet access has never been conducted via desktops. It is all via ultra-mobility, including smartphones, tablets and other small portable computing.
Google apparently will share its basic design building blocks of smartphones with manufacturers in the targeted emerging and developing markets. Google also will provide automatic software updates in this new Android One effort as well.
India was the market shown to have the first smartphones launched for under $100 later in 2014. The smartphone will have a 4.5 inch screen and will allow a dual SIM card so customers can switch between carriers. There was also a removable SD storage card, allowing for the phones to get more and more storage as needed by adding new chips rather than loading down the memory and storage inside the phone.
Where this gets interesting is that Android was shipped with more than three-quarters of the global smartphones in 2013, and now there are reportedly more than a billion monthly active Android users via smartphones and tablets. The goal is simple, even if ambitious: getting the other 5 billion or so as users in the coming years.
All of this sounds ambitious, and ultimately it will drive ever more mobile search, maps and other services that are owned and forged by Google. The financial question is how much money can be made off that last 5 billion people in emerging markets.