The emerging threat (to Google) of modified Android phones

The Next Web:

Android is available in two different flavors. There’s the Google-endorsed Android, which is used by companies that agree to the terms and conditions of the Open Handset Alliance (OHA). Essentially, OHA members include the Google services that are baked into Android, and agree to limitations on how they can customize the software on their devices.

The other side is the Android Open Source Project (AOSP), a far-freer version that lets device makers tinker with all manner of elements of the software. Often that means ripping out Google services, and customizing the handset to run other software and services. Google apps are still accessible, but are not central to the experience as they are in OHA Android devices.

Amazon’s Kindles run AOSP, replacing Google’s services with their own. The AOSP market is growing quickly.

Even though developing markets will likely be the main focus for AOSP device makers, more sophisticated ones like Xiaomi are opening non-Google Android to a new tier of more-affluent customers.

Google’s response? Android One, a low end OS with interface and Google services baked in, but tweakable to accommodate the needs and skins of the low end OEMs.

  • matthewmaurice

    I’m not sure that this is really a problem for Google. Aside from the Fires, and maybe the Xiaomis, what is Google really losing to those AOSP phones? Google benefits whenever anyone uses any Google service, and of course Google benefits more whenever more people use more Google services. Even if someone in China or India buys a cheap AOSP phone or tablet and doesn’t use a single Google app but search, Google still wins. In fact, getting all that “emerging market” user data into the algorithm now when they’re using just low-end devices will eventually pay off when their market is fully emerged and they’re using higher-end devices and consuming more valuable goods and services. Environment is everything in the smart device market, and you have to pay for the infrastructure the environment requires somehow. For Apple it’s selling high-margin hardware, for Google it’s selling targeted ads, for Amazon it’s selling basically everything. It will be interesting to see if Xiaomi can find an in-between niche, but handset makers without strong tie-ins to an environment will never be more than bargain basement white box devices

    • SockRolid

      Android is Google’s mobile ad platform. 97% of Google’s revenue comes from ads. Keep that in mind and (almost) everything Google does makes sense.

      • Although Android has zero ads except the one’s developers put in?

        [note: Google apps have zero ads too; they played w/ gmail app having some ads but that’s it]

      • matthewmaurice

        Google isn’t just about the ad itself. In fact, that’s the totally fungible part. What Google wants is the data about each user that its services, even the ones with no ads in them, generate which in turn allow the ads Google does place to be more targeted and therefore much more expensive. And for the record, as late at 2012 Google made fourt times more money from iOS than they did from Android.

  • I’ve said numerous times, Google embraces AOSP. It is the original intent to work this way.

    Consider writing on this topic a filler for a slow news week. It comes up ever so often.

    • matthewmaurice

      Define “embrace.” Google clearly would prefer that every OEM “Google Play” Android. They may not hate that AOSP exists, but if they were happy with the idea Google One wouldn’t exist.

      • They pay for [salaries, etc] and commit [code/apps] to AOSP regularly. It is the core of Android. Google services are a layer on top of it.

        Sure Google One would exist. It’s no different than Nexus existing. Google sees a market and wants to address it their way rather than wait for a partner to try to.

  • Terry Maraccini

    I think google has long known about this and decided that this canibalization of users is worth doing.

  • John

    It’s difficult to put a number on AOSP and Google’s penetration of the Android market. Google phones currently number about 1 billion and AOSP somewhere between 250-500 million phones. AOSP is growing at about 20% quarter on quarter now. Best guest is that Google has penetration in 2/3’s of the Android market.

    Google gets benefits from search on AOSP phones, But they also get that same benefit from a Nokia or Apple phone. An AOSP phone is simply a feature phone from Google’s point of view. Google’s basic business is feeding vast quantities of data into their learning engines. Google maps and Google+ being their best routes for this data on phones. If the percentage keeps shifting towards AOSP then the problem is how to attract users back to full Google phones.

    This is compounded by anemic Google services in China and the general weakness of the Google phone OEM’s. Samsung is their only strong OEM and now that’s threatened by AOSP vendors. It’s a tough spot for them.

    • SockRolid

      “Google gets benefits from search on AOSP phones …”

      Really? I thought Google search got smacked down pretty hard in China. Google search is only number 3, behind Baidu and Soso. And presumably those search engines also work with AOSP. Right?

      • John

        I agree that Google search is maybe 10-15% in China. But I’m thinking about the other 6 billion people on the planet.