Experts say Google has ‘finally found the right formula’ to help Android compete with Apple in the high end of the market (GOOG, GOOGL)

At a time when Apple’s iPhone is showing signs of struggling, Google’s smartphone approach finally seems to be hitting its stride.

This week, Google announced that its Android One certification program, begun in 2014, has grown 250% year over year in terms of activations — which the company defines as the number of new phones that have been set up and used.

Android One is not an operating system itself — phones certified under the program run on the stock-standard Android. Rather, to be certified as Android One, a manufacturer has to commit to keeping its device up to certain standards around how often it gets security and usability updates, and how many apps it has pre-installed.

This is important because fragmentation has long been a problem for Android — where devices are infamous for getting major new versions of the operating system months or years after the initial release, if at all. Android devices are similarly notorious for coming with pre-installed apps that often change the phone’s interface, sometimes called “bloatware.” Ultimately, it means that different Android phones can offer very different experiences.

Google’s own Pixel 2 smartphone, pictured, also aims to provide a premium Android experience that’s on a par with anything from Apple.
Jeff Chiu/AP

That’s worked against Android in competition with Apple’s iPhone, especially at the highest end of the market. But with Android One, Google is trying to make sure that customers have as good an experience with an Android phone as they would with an iPhone. This, too, is the idea behind Google’s own Pixel phones.

For its part, Android One began as a unique operating system for lower-end or entry level phones with the goal of helping the company capture its “next billion users” who often couldn’t afford pricier Android phones. Since 2017, however, the Android One program shifted towards the premium Android experience, with LG, Nokia, and Xiaomi, among others, signing on. And, as seen in those new numbers, customers seem to like it.

“Finally Google found the right formula to promote pure Android experiences in the mid- and high-mid tier Android segments,” Carolina Milanesi, Principal Analyst at the consumer tech research firm Creative Strategies, told Business Insider this week. “It leaves brands that have no means to differentiate from a software perspective or to appeal to an enterprise audience the ability to do so.”

Standardized software, at a lower price point than Apple

The growing effort to standardize the Android experience comes at a time when there might be a major opportunity in the marketplace, as Apple’s iPhone sales fell some 15% in the holiday quarter and it’s questionable the degree to which they might recover.

Read more: One of Apple’s best-known analysts says an all-time low iPhone upgrade rate is going to cause more pain than investors realize

This represents a strong opportunity for Google to expand the Android empire: Even the highest-end Android phones tend to be cheaper than a competitive model of iPhone — outliers like the Samsung Galaxy S10 notwithstanding.

The Samsung Galaxy S10 is one of the few Android phones that’s not necessarily any cheaper than an iPhone.
Antonio Villas-Boas/Business Insider

Milanesi said that Android One phones allow even less-expensive Android phones to offer an experience that’s more on par with the famous “it-just-works” promise of the iPhone.

“The price points compared to iPhones are lower but these devices do resemble the iPhone model on two ways: [they] are a purer ecosystem experience [and] guarantee to have the latest software which means they can take advantage of the latest applications,” Milanesi said.

Success should attract device makers

The recent uptick in Android One should also attract the attention of phone manufactures, according to Patrick Moorhead, President and Principal Analyst at Moor Insights and Strategy. It’s a sign, to him, that even if they don’t sign up for Android One explicitly, it’s a signal that phone makers are opting to go with the core Android experience, rather than try to dress it up with their own special sauce.

“The Android growth indicates to me that less handset OEMs [original equipment manufacturers] are customizing the experience with their own ‘skins.’ Instead, [they] opt for lower development and support costs, using a native Google Android experience,” Moorhead said.

Today, Android One’s hardware partners include HMD Global (Nokia), LG, Xiaomi, General Mobile, BQ, Motorola, Infinix, HTC, and Sharp. And just this week at the Mobile World Conference, Nokia announced that its new lineup of smartphones — including its five-camera Nokia 9 PureView— will all be a part of the Android One program.

Google CEO Sundar Pichai
AP

Increasing the number of devices using Android is important to Google from a revenue perspective because the operating system generates most of its dollars from mobile advertising. The more people on Android devices, the more people will be using Google Search or Chrome or YouTube and the more ad money there is to be had — or so the thinking seems to go.

“Nearly all of Google’s profit dollars comes from advertising,” Moorhead said. “For an effective ad business, one needs a lot of personal data and a display platform. An Android One experience guarantees Google gets both.”

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