Google's Android One: Project Stillborn

How you do you reconcile this:
The world's biggest online company launches a new wave of devices- devices which
  • overcome buggy stick-on interfaces by partners such as Samsung,
  • provide a great experience for first timers, and
  • launch with big-bang promotions in one of the world's largest mobile markets, with some of the biggest local phone brands as partners
And yet fails?
Google's Android One project, launched in India over the past three months, has been a middling affair, and when seen in context of the booming mobility market, an abject failure.
Google made a critical error at launch. As always, hindsight is a wonderful thing, but this error is so fundamental, it left me in the 'what were they thinking' mind frame- something that shouldn't happen when some of the smartest minds in the business were behind this campaign.
Now, in order to understand the issue, some background is important. Google came up with the Android One Project for some simple reasons:
  • Partners such as Samsung and the entire spectrum of low cost device makers (Micromax, Spice, Xolo) sell very poor devices at the lower end of the spectrum- these devices have buggy interfaces, poor touch screens, and no OS updates. After years of being seen as poor copy of iOS, Google wants to ensure the new experience on Kitkat (its latest OS version at the time) was available to the masses
  • The larger corporate strategy is to get more devices with Google's services embedded (search, Gmail) in the hands of middle and lower-middle class consumers in emerging markets- these would form the backbone of Google's growth in the coming years, as western markets mature and in cases, decay due to the large base effect. In other words, grow the customer universe, and create a larger ecosystem for ads to be served
  • Android has lower satisfaction rates on lower-end devices. Not everyone can afford a $400+ device. And when it comes to that price point, Apple looms large.
All of these were great goals, and I saw the program as the first real product play from the online services company. They made all the right noises, and I could see myself buying such a phone for my dad, a first time internet user, or, I could picture a couple of workers in my brother's factory buying such a device- a step up in price, but a big step up in quality and experience. There had been recent successes within the same product genre- Motorola had come up with the Moto E (a product which must have been developed at the time Google owned Motorola), and sold in good numbers. The Chinese juggernaut Xiaomi had launched the Redmi 1S to great success as well. All of these devices carried Android, and together with the Android One devices, promised to bring in a lot of first-time users- those using feature phones, and those becoming more confident about using smartphones.
And then, with the launch, Google made that critical error- it launched these devices exclusively Online.
The number of issues with this is stupendous, and I'm astounded no one at Google or its partners asked these questions. Again, some bullet points for your consideration:
  • Google's goal was to convert people who don't yet use the internet, to get online using their devices, And they decide to sell their devices... Online! The only analogy I can think of is trying to sell Medical textbooks to grade 1 students. If your most targeted segment of customers doesn't use search and email, how will they jump to e-commerce directly?
  • On-line Banking and Credit card availability, e-commerce awareness among this audience is at its lowest in the entire target market
  • English is a tertiary language for most of these customers. While the advertising reached across language newspapers, the buying experience was entirely in English
  • Buying $100+ devices would be a big investment for many of these customers- why would they invest in a device without seeing, and experiencing it? Google did quite a few activations, but their reach can't be matched by the deep penetration its partners- Micromax, Xolo and Spice enjoy in the offline market
While some of these issues sound rather reductive in their simplicity, the fact remains they are important enough. And not a single analysis I've seen in mainstream business publications has pointed to this fact, and asked these questions.
Offline availability seems to be an issue at this time, with large retail chains boycotting these phones because of their online-only launch, low margins and overall irritability with e-commerce, and any favours bestowed upon it (link). There are some offline availability measures being taken, but I doubt if they will be accompanied with the same large-scale advertising campaigns seen at the time of launch.
I'm a die-hard Google fan, and have been using and recommending its phones to everyone who would listen. But now that Google's getting into the hardware game, it must show the same common sense it has displayed in designing and delivering products that work for billions across the globe. I'm sure margin concerns from the manufacturers, price-point concerns from Google, and margins demanded by offline retail played a part, but that's the part Google had to underwrite to set this ball in motion.
I'm sure lessons are learnt, and distribution would henceforth be a big part of Google's Android One strategy, and it will see success. There are some new Android One devices planned for Q1'15, and they might just be getting things right the second time around.
I look forward to your thoughtful comments here, or on twitter at @ironymeter.
Photo: Android One website
Note: The views in this post are my personal opinion and do not reflect those of my employer.

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