The new Android One smartphones are a threat to Microsoft, not Apple
Android smartphones are often a mess of inconsistent hardware and wildly different software. So many companies make phones with varying displays, touched-up versions of the software, and seemingly random features that there isn't so much an Android market as there is a market for smartphones that happen to rely on at least some of Google's mobile software to function.
Google is working to change that with Android One, a smartphone-by-numbers project that offers manufacturers assistance with component sourcing in exchange for guarantees that the resulting product will meet various requirements determined by Google. The first set of these devices debuted in India today, and they can be had for around $105, or 6,399 Indian Rupees.
That price has already led some to compare these products to the iPhone 6, which costs $700 without a subsidized contract. The implication, which is often made whenever Apple announces a new product that doesn't cost the same amount as some of the cheapest Android devices around, is that Apple is leaving emerging markets open to marketshare-hungry competitors like Google.
That's probably right. Apple's one attempt to go after emerging markets -- the plastic-backed, ostentatiously colorful iPhone 5c -- was a flop. But Apple has never been one to chase the market so much as it's attempted to sell as many phones at as high a profit (key phrase) as it can. So it's probably not feeling particularly threatened by the cheap smartphones made with Google One.
There is, however, another company that should be concerned about those products: Microsoft.
When Microsoft acquired Nokia for $7.2 billion earlier this year, it acquired a business that was better at selling low-cost devices in poor markets than it was at selling premium smartphones in established markets. As I wrote when Nokia was still independent and fighting to survive,
Nokia is no stranger to emerging markets, with the company selling more than twice as many Asha-branded smartphones than Lumia devices during the end of 2012. The devices might not grab headlines or be co-introduced by Nokia and Microsoft in front of a rapt audience, but they have quietly become Nokia’s most popular products.
Improving those products — and partnering with Facebook to offer consumers free cellular data— could be more important to Nokia than building yet another high-end device that fails to compete with the iPhone or Samsung’s Galaxy S line. Nokia is a low-end smartphone maker that happens to have built some of the best-designed high-end smartphones on any platform. That isn't about to change now that Microsoft is the one making Nokia-branded phones. It seems to recognize that, as some of the first products it's announced are a so-called "selfie phone" and other low-cost devices, which is in keeping with Nokia's legacy and a total waste of Microsoft's newfound ability to create its own smartphones instead of relying on partners:
Microsoft has finally revealed its “selfie phone,” and it’s about what one would expect from the company that acquired Nokia’s phone-making division: a colorful device with a gimmick — a wide angle front-facing camera, in this instance — to set it apart from its staunch competition.
Lumia smartphones have followed that pattern for years. They feature colorful casings, a single feature meant to attract a consumer’s attention, and the Windows Phone operating system. The only difference is that this newfangled selfie phone is being sold by Microsoft instead of Nokia. Cheap smartphones were Nokia's bread and butter -- or displays and circuit boards, as it were -- and now they've become Microsoft's, too. The threat of having low-cost Android smartphones that meet minimum requirements and must be upgradeable to the next version of the software should scare any who relied on the Android market's fragmentation to survive in the past.
Microsoft is now among those companies, or at least its phone-making division is. Apple is not. If we're going to trump-up the threat posed by some $100 smartphones we might as well make sure we're targeting the right company.