Ever since the Google I/O conference occurred this year, Samsung has been worried about the Android One program which makes use of stock android OS for enabling manufacturers to come out with budget phones that pack some amazing features. The quantum of demand that is being witnessed for such budget friendly yet performance driven smartphones is tremendous.
In keeping with this demand, Google has partnered with 3 smartphone makers (Micromax, Karbonn and Spice Mobiles) from India to come out with budget phones that would be developed under the norms of the Android One Program. Apart from garnering consumer strength and loyalty, the Android One provides a direct threat to the already withering market share of Samsung.
What is Android One’s Intention?
Quality enhancement is the primary agenda for the Android One program wherein the demand for low end android smartphones would increase in the market. th main concern with the current state of affairs in the android smartphone market segment pertains to the use of customized OS which are integrated with hardware configurations that are modified by the manufacturers. As a result, the devices are prone to glitches and errors. This is the problem that Google wants to target directly by officially providing stock android versions to the manufacturers and supporting them to come up with devices that can match up to global performance standards.
Google intends to bring out Android One smartphones globally, but the reason for targeting the Indian market is that the market is third biggest and fastest growing arena in terms of sales prospects. Global exposure would definitely benefit the company but it would take time. For immediate results, India offers a fertile and demanding market.
Many people in India have not yet purchased a smartphone so if they buy the Android One phone for the first time, then there is a good chance of receiving positive feedback which would drive sales and brand promotion for the phones. This initiative would also promote common standards and consolidation in a market that is characterised by the presence of over 80 brands.
What Does This Mean for Samsung?
Samsung uses a customized version of Android which is prominent in its high end offerings, especially in the Galaxy Series. But it is this very focus on the high end phones that would be disrupted if Android One were to hit the market. The company is completely aware of the possibilities and the impact of a mass positive reception for the phones.
The launch of Android One would not only shift the direction of the race to the bottom of Samsung’s pricing, but the company would also be subjected to intense pricing pressure owing to the need to hold on to whatever market share is left for the former market leader.
Samsung may be leading the Indian smartphone market, but it is gradually losing its hold. This has been evident from the quarterly financial reports which indicate that in Q2, Samsung’s revenue dropped to 25.30% from 33.30% in Q1. If these figures were to be compared with an Android One Program member, say for example Micromax, then it is clear that Micromax has gained revenue by jumping to 19.10% in Q2 from 16.70% in Q1.
It seems that Samsung has finally been cornered into a dreadful situation where it is being given tough competition by Apple in the high end smartphone segment while in the budget segment, Android One would be taking the bigger share of the pie. The only possible avenue for Samsung is to focus on the low to mid-range segment, if it intends to hold on to its existing market share.
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