Android license policy has little impact on smartphone vendors

Source:Global Times Published: 2018/11/22 21:53:40

The brand logo of Google is seen outside its office in Beijing in August. Photo: VCG

Google's new license-fee policy will have little impact on Chinese smartphone vendors in overseas markets, as some have been shifting their focus away from cutting prices to gain market share and toward upgrading products to achieve better profit margins, analysts said.

The US giant is about to charge as much as $40 per device to install the Google Mobile Services suite of apps under new EU Android deal, US technology site recently reported. The story sparked debate over whether Chinese vendors, particularly those with operations in the European market, will be also be affected by rising costs. 

"For now we are monitoring the situation, but as of today there has been no impact or change," a PR representative of Chinese smartphone maker Xiaomi Corp told the Global Times on Thursday.

The change followed Google's response to the European Commission's competition decision against Android, which was published on its official website on October 16.

"Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the European Economic Area. Android will remain free and open source," Google said in the statement.

Although there have been no details about the new paid licensing system, Chinese industry analysts believe there will be little impact on vendors such as Xiaomi and Huawei Technologies.

"If smartphone vendors gain larger market shares only with low prices, there might be a direct impact on them if costs rise," Wang Xi, an analyst with IDC, told the Global Times on Thursday. "But more Chinese companies have been shifting their strategies away from low prices to innovative features and high quality, which could offset cost hikes," he said.

Although smartphone shipments fell 6.3 percent in Europe in the first quarter of 2018, Chinese vendors such as Huawei and Xiaomi recorded robust growth. Those two companies held 16.1 percent and 5.3 percent of the market, respectively, industry consultancy Canalys said in a report published in May.

Huawei declined to comment on the latest Android licensing policy when contacted by the Global Times on Thursday.

"The major impact will be on the middle- and low-end segments of the smartphone market," Fu Liang, an independent industry analyst, told the Global Times. "Also, it's a universal policy, so other vendors like Samsung will also bear higher costs," he said.


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