The next round of Android One phones will retail for as low as $50, according to the Financial Times.
(It may be even cheaper than that. Rajan Anandan, Google’s managing
director in India and Southeast Asia, apparently told the FT that he
wanted Android One to target Indian “sweet spot” of $31 – $47 but the
article was later corrected to insist that the phone would not be sold
at under 3000 rupees, or $47).
The news will cause pain to high-price Android phone manufacturers like Samsung, HTC and LG. We told you yesterday that HTC now makes such high losses selling Androids that its stock indicates the company is technically worthless.
And LG currently makes only 1.2 cents profit per phone that it sells.
Samsung’s revenues have also been in decline, as super-cheap Android
phones cream off the low end of its business and Apple’s iPhone 6
decimates the high end.
So it looks as if Google’s super-cheap Android One — which is also
supposed to be a high-quality phone — will bring even more discount
pricing pain to those companies.
Given that Google needs Android manufacturers to be successful in
order to make Android a widespread platform for the apps that Google
makes from, why would Google do this? Anandan told the FT:
important,” he added. “Don’t get me wrong, the revenue is interesting
but … we’re here really because 10 years from now a billion Indians
will be online and when we have a billion Indians online we think that’s
going to make a huge difference to the global internet economy.”