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Android aims to offer mid-range hardware at budget prices

After teasing about "Android One" at its annual developers event Google I/O, Google Inc. (GOOG) has finally announced launch plans for the program.  The upcoming collaboration with domestic OEMs and top telecoms in India and other developing regions aims to put smartphones in the hands of currently unconnected users, a goal many in the industry are pursuing.
 
I. Android One Program Officially Launches, Shipping Soon to India
 
The program can also be viewed as a potshot squarely at Microsoft Corp.'s (MSFT) Windows Phone.  While Microsoft has stuttered in challenging Google's Android alliance and Apple, Inc. (AAPL) on the high end, on the budget range it's seeing its strongest success.  

Android One
Micromax's India-aimed Android One handset [Image Source: Google]

In some -- regions such as India -- it's a serious contender and is seeing increasing interest from OEMs.  Both Android and Windows Phone are available to OEMs for free (monetized by Microsoft and Google taking a cut of mobile advertising revenue).  But Android OEMs typically have to pay patent licensing fees to Microsoft, which are typically around $5-10 USD per device.
Android One Logo

Google says it’s vital to increase smartphone adoption in developing regions.  The internet services and mobility giant points out that while 1.75 billion people worldwide now own and used a smartphone, 5 billion people don't have access to a smartphone device.  Now it thinks it has a way to connect those users.
 
Note that at launch the program's devices appear to be around $105 USD.  This is slightly higher than the sub-$100 USD price target Google initially set back in June.  Expect device prices to slowly creep down under $100 USD, though, as the effort progresses.
Android One

Here's the key details of the program:
  • Availability
    • First partner devices on sale this month or next month in India
    • Available in Indonesia, the Philippines, and South Asia (Bangladesh, Nepal, Pakistan, and Sri Lanka) by the end of 2014
    • More regions in 2015
  • Price
    • Handsets for initial India rollout will cost Rs 6,399 (~$105 USD)
  • Hardware partners
    • Devices will come from a variety of partners, who agree to direct Android updates from Google and adherence to a quality budget spec
    • Initial partners for India are:
    • Pending parteners include:
      • OEM
        • Acer Inc. (TPE:2353)
        • ASUSTek Computer Inc. (TPE:2357)
        • HTC Corp. (TPE:2498)
        • Intex Technologies Ltd. (private, India)
        • The Lenovo Group, Ltd.'s (HKG: 0992)
        • Lava International Ltd. (private, India)
        • Panasonic Corp. (TYO:6752)
        • TCL Mobile Ltd.'s (HKG:2618) Alcatel OneTouch brand (a subunit of China's TCL Communication and France's Alcatel Lucent SA (EPA:ALU))
        • Xolo (private, India)
      • Hardware
        • Qualcomm Inc. (QCOM)
  • Hardware Spec:
    • ARM SoC (currently provided by MediaTek Inc. (TPE:2454))
    • 4.5-inch screen
    • dual-SIM cards
    • an FM radio
    • replaceable batteries
    • 3G or 4G cellular
  • Android-One exclusive perks
    • Google will provide part of the data free of charge to users
    • Requires SIM card from top Indian telecom company Bharti Airtel Ltd. (BOM:532454)
    • User will received Android updates directly from Google
    • Updates will be free regardless of size, for the first 6 months.
    • After that the updates will still be available from Google, but user will pay data costs.
    • Android One devices will be among the first to get Android L update later this year
    • Users will have 200 MB worth of free Google Play app downloads (~50 apps)


Google's new Android chief, Sundar Pichai, writes in the launch blog, "Access for access’s sake is not enough. With Android One, we not only want to help people get online, we want to make sure that when they get there, they can tap into the wealth of information and knowledge the web holds for everyone."
 
II. Microsoft Counters With Sub-$20 USD Feature Phone
 
Not to be outdone, Microsoft countered Google's announcement with a fresh release of its own on the budget end, the Nokia 130.  The Nokia 130 is the most affordable model in Microsoft's line of Symbian S30+ feature phones that carry smartphone-like capabilities.  It is also the first phone in the line to be priced at under $20 USD at launch.  The device will be rolling out to China, Pakistan, Nigeria (Africa's most populous country), and India "in coming weeks".
 
Microsoft is countering with a two-pronged approach.  On the high end it will be pushing Windows Lumia smartphones, priced at around $40-100 USD.  On the low end it will push feature phones with smartphone-like capabilities.  For that effort it will be using Nokia Devices' Symbian S30+ platform.  Its featurephones will be rebranded as "First" phones, replacing the aging "Asha" brand.
 
It's unclear if the Nokia 130 is going to immediately receive the "First" rebranding or is a precursor to it.  But we do know it will be joining the already announced Nokia 220 and all-touch Nokia 230 (Feb. 2014), plus the Nokia 225 (April 2014).
 
Here's how the new device stacks up against Microsoft's last release, the Nokia 225: 
 
Nokia 130
Nokia 130
  • Price: Rs 1,498 / €19 EUR / $25 USD
  • Varieties: dual-SIM, single SIM
  • Size: 106x45.5x13.9 mm
  • Weight: 68.6/67.9 g for dual- and single-SIM versions
  • Display: 1.8-inch QQVGA (128x168 pixels) / 16 bit color LCD / 114 bit ppi
  • Storage: microSD (up to 32 GB) 
  • Connectivity: BlueTooth 3.0 / 2G cellular / microUSB (wired)
  • Battery: 1020 mAh 26/36 hours of standby for dual- and single-SIM versions, respectively
  • Other:  (no camera) / LED flashlight / MP3 compatible / FM radio

Nokia 225

Nokia 225
  • Price: Rs 3,199 (discounted) / €40 EUR / $55 USD (to be cut below Rs 2,400 / $40 USD)
  • Varieties: dual-SIM, single SIM
  • Size: 124x55.5x10.4 mm
  • Weight: 100.6 g
  • Display: 2.8-inch QVGA (240x320 pixel) / transmissive LCD / 142 bit ppi
  • Storage: microSD (up to 32 GB) 
  • Connectivity: BlueTooth 3.0 / GPRS 3G cellular / microUSB (wired)
  • Battery: 1020 mAh 26/36 hours of standby for dual- and single-SIM versions, respectively
  • Other:  2 megapixel camera / LED flashlight / MP3 compatible / FM radio

Microsoft recently scrapped its Nokia X and Asha brands as part of its branding makeover.  In the long run, Microsoft's goal is to ditch Symbian altogether, deploying new Windows Phone devices for under $50 USD.  Chris Weber, Microsoft's vice president of mobile device sales, told The Economic Times of India in a recent interview:

We're just beginning a refresh of the entire portfolio.  We aim to push the price point of Windows phones significantly lower - we certainly see that happening on the Android ecosystem - without impacting quality and experience. 

Microsoft vice president of phones, Jo Harwell, added:

On the 'First' side, we will continue to introduce new devices - First Bing, First Internet devices, First mobile phone devices.

As that comment alludes to, Microsoft will look to join Google in offering access to its premium internet services in the developing world.  In Microsoft's case this means free access to services such as Bing Search and OneDrive.

Lumia 530
Microsoft's Lumia 530 Windows Phone debuted priced at around $115 USD for a single-SIM version.

Each platform has its unique sales advantage.  Google has the market share, momentum, and perk of free data (a big deal given how much data costs in the developing world).  Microsoft has lower device costs (given the lack of OEM licensing fees) and the veteran legacy of Nokia -- long the top device seller to the developing world.  One thing is for sure -- the battle for the developing world and its potential user base is heating up.

Sources: Google Blog, Microsoft's Nokia [Conversations blog], Economic Times of Inida





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