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​Google strikes out with Android One in India

Google has experienced lousy sales of its OEM-partnered Android One smartphones in India. Yet, the company seems committed to the long haul in what is a sizzling smartphone market.

When Google announced the Android One for India -- where Indian phone makers like Micromax, Spice, and Karbonn would be roped in to provide low-cost, $100 smartphones that adhered to a standardized, Google-mandated spec sheet -- it caused an enormous buzz.

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This seemed like the beginning of a savvy plan by the search giant to definitively establish the Google-made OS as the one to rule the Indian phone landscape by putting an economical Google-powered phone into the hands of the "next billion" (the 70 percent of the 1.3 billion members of India's population who still don't own smartphones, but who will undoubtedly buy one in the next five years).

Just a few months after Android's launch, a slew of articles began to appear about the lukewarm response that the Android One campaign was receiving. However, recent reports, including this detailed article by the Economic Times, seem to suggest that the Android One is an affair to forget, especially if you compare it to the sensational launches and demand for phones made by Motorola, Asus, Xiaomi, and Lenovo, amongst others.

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Apparently, around 800,000 Android One devices were shipped between the September launch and the end of May, which comprises about a third of all sub-$100 smartphones shipped to India in the first quarter of this calendar year. This was far below what a blockbuster launch from the search giant should have been. To get some perspective on this sizzling smartphone market, 22 million units were shipped in the quarter ended in December 2014.

Some of the other tell-tale signs of the bleak fortunes of the Android One: The price on Karbonn's model, for instance, has dropped substantially, from Rs 6,399 to Rs 4,798, on e-commerce site Snapdeal, a sure sign of weak demand and waning interest in the model. The more definitive dagger in the heart of the Android One is a lack of interest by the three Indian phone-making partners (Micromax, Karbonn, and Spice) in working on the next iteration of Android One phones, according to the Economic Times.

Apparently, there is also no developmental road map in place. "We sold off what we had imported, but nothing concrete is happening [on the next set]," said Prashant Bindal, chief executive of Spice Mobility, to the newspaper.

Those waiting in the wings to capitalize on an Android One wave have also apparently stepped back from doing so. "Everything was finalised, the product was ready, but market response was not there, so we dropped the idea," said Sanjay Kalirona, business head for mobile phones at Intex, to the Economic Times.

Apparently, an executive with Indian phone maker Xolo vocalized one of the key reasons why the Android One may not have excited the imaginations and wallets of Indian consumers: "The scope for differentiation is very little," he said.

"It seems Google itself has turned out to be the toughest competitor for Android One devices, keeping in mind the wide range of affordable Android devices available in the sub-$100 segment in India these days," added Tarun Pathak, lead analyst at Counterpoint Research.

If this is true, then the whole raison d'etre of the Android One idea faces an existential threat: Consumers want to buy phone brands first, not operating systems. Faced with a flood of what is essentially the same phone in a different skin doesn't seem to be such a hot proposition after all. Of course, in my opinion, this is pretty much what so many phone companies do anyway; phones are armed with the same processors, cameras, screens, and OSes. Yet, they all tout themselves as being uniquely different. In which case, at a minimum, the appearance of differentiation at the very least seems to be important in order to get the consumer to pick your unit versus an almost identical one offered by a competitor.

Another key reason for lacklustre sales was what you could charitably describe as a boneheaded strategy of only flogging them online in a country where e-commerce is just finding its legs, and where customers famously enjoy the experience of going into stores and checking out phones in person before deciding whether to buy them.

"Initially, people couldn't buy them in all channels -- something we need to address," said Caesar Sengupta, vice president of Product Management at Google, in the ET article. The Android One has been lacklustre enough to even dissuade other phone brands, such as Xolo and Intex, from participating in the project."

For all of these tales of woe, Google seems pretty steadfast with its Android One ambitions. "Within Google, we're very happy with the progress of Android One," said Sengupta in an interview with ET. "We will continue to take a lot of learnings and keep doing it better in every market that we go to. In India, when we do the next set of devices and launches, you will find us doing it better."

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In fact, Google seems determined to stay the course in India. "We're not backing away from the program," Google's Sengupta added. "We've learned a lot from the initial round with our partners, and they have learned in terms of device availability, in channel, and others. Over time, as we work with our partners, we will keep working on making sure that we do things much better."

One reason for this steadfastness, as this Mint article points out, could be a grander strategy at hand where Google's lightweight chromebook, armed with a Chrome OS, will work in tandem with the Android One to expand the Google web in India. According to a recent Gartner study cited in the paper, "Sales of chromebooks are set to nearly triple to reach 14.4 million units by 2017 from 5.2 million units in 2014 -- itself a 79 percent increase from 2013 figures."

To many, all of this hand-wringing about the Android One is pointless, since the overwhelming majority of phones sold in India are ones with an Android OS anyway. Still, with smartphones becoming the primary way that the majority of Indians will access the internet, a stable user experience stripped of bloatware could be just the thing to attract the huge mass of Indians migrating to smartphones. But that requires a successful Android One sales and marketing strategy, which sadly just isn't apparently in place.