Google, Xiaomi Revive Stalled Android One Program for India

(Bloomberg) -- Google is teaming up with China’s Xiaomi Corp. to resurrect its Android One smartphone program for India, revamping a stalled effort to showcase its mobile software for users in emerging markets.

Xiaomi’s Mi A1 dual-camera device goes on sale Tuesday for 14,999 rupees ($234) and will be its first under the Android One banner. Alphabet Inc.’s search giant started the project in India three years ago to get affordable phones in circulation sporting the latest features, a persistent weakness when compared with Apple Inc.’s pricier and often beefier iPhones. But early partners, particularly in India, couldn’t sell enough of the devices and interest waned.

The Indian partnership marks a departure from Google’s earlier cheap-gadgets approach, and is intended to shore up their presence in the world’s fastest-growing smartphone market. The Mi A1 is a mid-range phone that will be sold in countries from Indonesia and Vietnam to Russia and Mexico. Xiaomi, now the No. 2 brand in India, is looking outside China to rejuvenate growth and arrest market share losses. Google wants more users while ultimately imposing order on a fragmented Android ecosystem.

“Google came to us in Q4 of last year as they were seeking to evolve their Android One program,” Xiaomi Senior Vice President Wang Xiang wrote in an email. “The Mi A1 is an entirely new type of device.”

The all-aluminum smartphone is Xiaomi’s first with a dual camera to be launched in India, and comes with free unlimited storage of photos and videos, he added. Devices will be better optimized for Google’s digital voice-based Assistant.

Launched in India at the end of 2014, Android One was a signature project of Chief Executive Officer Sundar Pichai, then Google’s Android head. A native of the country, he pushed to get more people in emerging markets online and thus onto Google’s services. He also advocated fixes to Android’s fragmentation, where most phones with Google’s software run older, less secure versions of the operating system. Android One -- envisioned as a way to sell affordable devices with up-to-date software by collaborating with hardware vendors -- aimed to hit both goals.

At the outset, Google said it was setting manufacturing reference points so partners could sell devices for near $100. India’s three biggest phone makers -- Micromax, Spice and Karbonn -- released a bunch of models priced around that level, but sales were underwhelming. Then came a lull in launches as the program seemed to falter.

Xiaomi’s new phone is aimed at the middle market, reaching fewer Indian buyers but avoiding the intensely competitive low end, where brand affiliation matters less and margins are thin. It was SoftBank Group Corp. that convinced Google to move away from cheap gadgets, Android Vice President Jamie Rosenberg said. In the past year, the Japanese company announced it would carry phones with Android One specifications for between $200 and $500 apiece in its own stores.

Under the re-tooled Android One model, Google is dropping certain specifications that pushed manufacturers to produce cheaper phones. Version 2.0 is less “one-size-fits-all,” Rosenberg said. The goal remains the same: Getting the latest Google services in more hands.

Unlike Apple, which maintains tight control of the iPhone environment, Google relies on a network of carrier and hardware partners. Many run outdated software with less frequent security updates. Less than 14 percent of Android phones run the latest version of the operating system.

Also, other partners have run their own software on top of required services like the Google Play app store, Gmail and Maps. In China, Xiaomi built a ‘Mi’ suite of software that was customized, or skinned, on top of Android. The Mi A1 will also come pre-loaded with a suite of Xiaomi’s camera, social media, e-commerce and other apps.

Xiaomi wouldn’t share sales targets but said the device will be sold online and offline, via Mi.com, Mi Home stores as well as through e-commerce partners and brick & mortar retailers. Rosenberg said that Android One would draw in more device partners and markets over time, no matter the price. General Mobile Inc. has committed to make a full range of Android One devices in Turkey, and recently released its fourth phone there, the GM 6.

“The selling point has really been this clean Android experience with the promise of updates,” Rosenberg said. “That’s independent from price point.”

To contact the reporters on this story: Mark Bergen in San Francisco at mbergen10@bloomberg.net, Saritha Rai in Bangalore at srai33@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan