Phones for the Next Billion People: Android Thinks Big

Who are all those people? The one's without smartphones? We can probably guess, but it makes us feel a tad guilty so we prefer to focus on the relatively minor differences been Apple products and their Samsung Google competitors.

The reality is that most of the world doesnt own smartphones because they can not afford them and because even when they can scrape the cost together, the service isnt available and may be too expensive or, in many cases, both.

The further challenge is that Apple tested that market - sort of - with its iPhone 5c, which was less expensive than its sibling, the 5s. And guess which one sold better? Why yes, the more expensive model. That happens when your electronic device is also a fashion accessory and the functional equivalent of a sociological status determinant.

It makes strategic sense for Google to be thinking about this market. A) because it's underserved and B) because Apple so dominates the upscale end of the demand curve. It also helps create an ecosystem through which lots of related products can be sold and relationships strengthened. The nagging question is whether someone else - the Chinese come to mind - will get their first while no one is looking. JL

Brad Stone reports in Business Week:

"It’s really important we figure out one day how we can have a great smartphone at $50 or $100,”
September is shaping up to be the month of Apple (AAPL). But not if Google (GOOG) has anything to say about it.
The search giant is promising a wave of updates to Android Wear, a version of its Android operating system tailored for the wrist-borne gadgets once boringly known as watches. The circular Moto 360 “smartwatch,” which runs Android Wear, will be publicly unveiled on Sept. 4 at an event in Chicago. Other hardware manufacturers are poised to unveil wearable devices that run Android.
If past years are any guide, we will also soon hear more about the next version of Android, codenamed “the L Release,” as well as an accompanying Google Nexus phone highlighting the new software’s capabilities.

And then there’s the recently announced Sept. 15 press event that Google will hold in India, where the company is likely to launch the first set of Android One smartphones.
What is Android One, and why does it matter? The software, first announced in June at Google’s I/O conference, is the search giant’s effort to retrofit the newest version of its free mobile operating system to phones with less memory and cheaper components. Google said at I/O that it is working with such smartphone makers as India’s Micromax and Karbonn to develop these phones, which have the latest Android features, run the hottest apps, and can sell for less than $100.
The phones are intended to expand the smartphone market. This year, 1.75 billion people will own smartphones, according to EMarketer. There are 4.5 billion mobile phone users overall and 7 billion people in the world. While Apple is set next week to announce larger iPhones at its usual premium prices, Google sees just as much opportunity in those untapped sectors of the market.

Inside Google’s Android division, the Android One effort was originally called Sprout. “For me it’s really important we figure out one day how we can have a great smartphone at $50 or $100,” Android chief Sundar Pichai, a native of India, told me earlier this year, adding that it highlighted a philosophical difference with Apple. “The challenge of what we are trying to accomplish is a bit different than the challenge of someone like Apple. … I think that difference matters. It forces us to take different journeys.”
If the phones catch on, Android One can solve a number of problems for Google. Previously, smartphone makers in developing markets used older versions of Android on their low-memory, low-cost smartphones and then left out Google’s money-making services, such as its search engine and Google Maps. Android One will come packaged with those standard apps. It will also make life easier for developers who want to write apps that play on a range of Android devices all around the world. Android’s so-called fragmentation problem is a key reason developers tend to focus on Apple’s iOS first.