The Information’s Amir Efrati claims that Google is telling potential partners in the country that it is planning to spend “at least several hundred millions dollars” to boost awareness for phones made as part of the Android One initiative.
The Economic Times of India’s report cites a much lower number: approximately $17 million. The Economic Times also states that the push will begin in October and that Google SVP Sundar Pichai will visit the country as part of the launch effort.
While the figures don’t line up — which could simply be due to sources talking about different time frames, i.e. Google could spend $17 million right away with more to come based on how well the campaign does — the news itself makes a lot of sense.
The Indian market is huge and smartphones haven’t penetrated there like they have in the United States or even other emerging markets like China. According to IDC data, smartphone penetration in the world’s second most populated country is at about 10% despite 186% year-over-year growth for the category in the first quarter of 2014.
With Android One, Google is looking to make it easier to launch affordable devices in emerging markets. It’s working with suppliers to ensure cheap but powerful parts used by OEMs will be compatible with the latest versions of Android, providing access to the Google Play Store, and handling updates to the Android operating system while still allowing device makers to install their own apps on devices.
At Google I/O, Google’s Pichai announced that the company is working with Micromax and other device manufacturers in India to bring multiple devices in the ~$100 range to the country by the end of the year. That’s a price range that’s proven to do well in India, with Motorola’s low-margin lineup selling a million units within five months of entering the market.
By getting in while the Indian smartphone market is still in its infancy, Google has a chance to capture a significant portion of it as people are still deciding their preferences in operating system. The Android One initiative is important Google because it gets people into its Play Store ecosystem instead of smaller third-party app stores generally offered on the millions of cheap phones and tablets sold in emerging markets running the open source version of Android.
While it’s not bringing in a lot of money just yet — India has yet to crack the top 5 countries in terms of revenue for Google Pay — App Annie’s latest Market Index suggests that Google is at least doing a good job of getting users into its app ecosystem, with India outpacing South Korea and Russia in terms of download numbers. That puts the country right behind the United States and Brazil, the 1st and 2nd largest countries by app downloads, respectively.