Google ( GOOGL) is likely to unveil its much-awaited low cost smartphones in India this month, thus intensifying competition in the thriving multi-billion dollar smart devices market in the country.
Android One is an initiative where Google will design budget hardware while other companies will manufacture it. The company plans to team up with Indian smartphone makers like Micromax, Karbonn and Spice.
Among the many positives, the most prominent one is that Google will be able to impose a minimum set of standards for the Android handsets. These phones will get the same treatment as the Nexus and Google Play ranges when it comes to automatic software updates.
According to research firm IDC, in the second quarter of 2014, 18.42 million smartphones were shipped in India. The Android One Initiative, however, signals bad news for Korean electronics giant, Samsung ( SSNLF).
Densely populated emerging markets like India and the Philippines are switching from feature phones to smartphones. Though Samsung is the leader with a 29% market share, Micromax (18%), Karbonn (8%) and LAVA (6%) are close competitors.
While Android dominates the operating system market globally, others like Windows and iOS are also popular. Recent platforms like Firefox and Tizen may also emerge as strong competitors to Google's platform.
Google aims to capture a larger share of the entry-level segment.
With the Android One, Google promises to deliver the high-end smartphone experience on low-cost devices. However, recent reports indicate that these phones might not be as cheap as expected. The Android One phones are rumored to cost between INR 7,000 to INR 10,000, up from the initial expectation of INR 6,000.
Recently, Firefox (in partnership with Spice and Intex) launched two new smartphones, priced below Rs 2,300, aimed at those wanting to upgrade from feature phones to smartphones.
The Android One launch in India is expected to be vital for Google as it is likely to launch similar handsets in other emerging markets on the basis of consumer response in India.
Google currently carries a Zacks Rank #3 (Hold). Better-ranked stocks are Baidu, Inc. ( BIDU) and Inuvo Inc. ( INUV), both sporting a Zacks Ranks # 1 (Strong Buy). Borderfree Inc: ( BRDR) holds a Zacks Rank #2 (Buy).