Google launched Android One about a year ago with the hope of bringing “the next billion” people online via a smartphone. By offering a decent phone for around a $100 off contract, people in emerging markets would finally be able to afford one.
Unfortunately Android One hasn’t lived up to its expectations. Google partnered with a number of local manufacturers to meet the $100 price point in India, Bangladesh, Nepal, Sri Lanka, Indonesia, the Philippines, and Turkey, but sales have been lackluster.
Google managing director in India and Southeast Asia Rajan Anandan told the Financial Times that Google is still very much committed. He said that supply issues led to shortages, which is common for new product launches.
With that said, it appears price is still an issue since Anandan wants to work with manufacturers to bring the pricing down to Rs3,000 ($47) in India, which is a 50 percent reduction. He calls this the sweet spot for mass adoption.
Google isn’t about making money on the hardware. The company is all about its services like YouTube and Maps. However, Google has been struggling to capture revenues in countries like India because they lack the proper data speeds for apps like that to be effective. The company has attempted to combat this by launching offline versions of Google Search, as well as YouTube and Maps.
Of course, Anandan is downplaying the profitable aspect of this by saying, “Strategically it [India] is very, very important,” he added. “Don’t get me wrong, the revenue is interesting but … we’re here really because 10 years from now a billion Indians will be online and when we have a billion Indians online we think that’s going to make a huge difference to the global internet economy.”
A $50 Android One phone would most likely play a big part in getting the next billion online, but don’t expect it to happen anytime soon. It will take time for manufacturers of chips and components to adjust their pricing to device manufacturers.