Google Android One flops in India again

NEW DELHI: Google's revamp of its Android One operating system for smartphones does not appear to have helped the search giant much, if shipment data from market research firm Cybex Exim Solutions is anything to go by.

In the second version -- which was brought out by vendor Lava -- Google shifted focus to people who have used smartphones before with higher device price and better specs of Pixel V1, but it failed to enthuse consumers and shipments dropped sharply in September and October, according to data from Cybex Exim. ET was given exclusive access to this data.

Lava, however, disagreed. "Lava Pixel V1 has received a positive response in the market," the company said in response to ET's queries, adding that the device is getting the Android Marshmallow upgrade. Google refused to comment on the matter.

Lava, which was phase 2 partner for Google's Android One initiative, rolled out Pixel V1 in July for over Rs 11,000 almost double the price of the first handsets launched a year ago.

Data aside, experts and market insiders said that by not bringing the 4G LTE variant of the latest Android One smartphone in India, Google and Lava failed to gauge consumer need and market trend, which resulted in their device not doing as well as the 4G devices that Chinese and domestic handset vendors launched at much lower price points.

Google's partners in Thailand and Philippines, I-mobile and Cherry Mobile, respectively had a different plan around the time Lava launched Pixel V1 in India they both launched the LTE variants of Android One smartphone.

"The Pixel V1 started off well on account of aggressive marketing push, but lost to the competition in late Q3 of 2015 due to new LTE launches in the same segment targeted at the festive season," said Tarun Pathak, senior analyst with Counterpoint Research.

Sources had earlier told ET that Google has spent about $10 million (Rs 60-100 crore) on marketing and promotion for the second phase of the Android One project in India.

In July, Lava had imported 38,730 units of the Android One smartphone. The following month the figure leaped to 83,750 units, only to plunge to 5,000 units in September and 2,500 units in October, according to data from Cybex Exim.

According to Pathak, Lenovo's K3 Note was the best-selling device in the third quarter with almost 800,000 units sold. In comparison, Pixel V1which falls in a similar price segment as K3has gone just past 100,000 units during the same period, despite marketing support from Google and the offline retail strength of Lava. "Pixel V1 even remained behind Lava's bestselling smartphones under its IRIS and Flair series, as lack of LTE in sub $150 segment impacted its growth," Pathak said, adding that Google needs to create positioning of Android One devices, the way it does with Nexus devices. It should be positioned as the 'Nexus' of entry level segment.

According to Counterpoint, only 1.2 million units of Android One were shipped to India during its first year (September 2014 to September 2015) in the country, making up only 3.5% of the $50-100 phone market, the segment which sells the most phones. Only 3 million devices are said to have been shipped in total across the 19 countries that Android One has launched in. Of this, 85% of sales took place in the Asia-Pacific market.

Counterpoint's Pathak said that for Android One to succeed in India, Google and its partners need to scale down to lower price points and differentiate the product from biggest competitor which is 'Android' itself, which is competing with Android One via original equipment makers (OEM) that are present across $50-$100 price band in India.