Google Inc (NASDAQ:GOOGL), (NASDAQ:GOOG) might have nailed the key to making money from “poor” African and Asian countries while Apple is still ignores 90% of the smartphone market because they can’t afford its phone.
The Associated Press reports that Google is ready to launch a low-priced smartphone in six African countries in a move that will increase the chances of milking ad dollars from those countries. Google’s move contrasts sharply with Apple’s stance and Google will make money in emerging countries long before Apple Inc. (NASDAQ:AAPL).
The low-cost Android phone, which will be made by Infinix will cost about $87 and it will be sold in Nigeria, Ivory Coast, Morocco, Egypt, Kenya and Ghana. Local online retailer, Jumia, will sell the smartphones and there won’t be markup costs to the final buyers. Google had such a deal with Infinix last year when it build “Hot 2” as part of Google’s Android One program that started in India last year.
Searching for growth in emerging economies
Google is not fully involved in the hardware business of making smartphones – its Nexus plan didn’t go very well. However, the firm needs the Android platform to grow so that it can continue selling mobile ads for revenue growth.
Apple’s iPhone sit in second place behind phones Samsung phone srunning Google’s Android OS. Apple has been seeing a lull in iPhone sales as the markets of North America and Europe continue to mature.
Google’s Android One push in is a smart move and the firm will find it easier to monetize ads through cheap phones than it is for Apple to sell expensive phones. Apple doesn’t intend to leave its premium high-end phones for entry-level low cost phones; hence the firm will have to find a better way to make money in emerging markets with its iPhones.
Google’s gain, others’ loss
The low-cost Android smartphone is set to be smashing hit when it hits those emerging markets. For one, the price is a steal because $87 very cheap when compared to the $700 to $800 price range of Samsung phone running the latest version of Android.
Apart from the cheap $87 price tag, the smartphone will be powered by last year’s “Lollipop” version of Android. More so, it will be able to run the nest Android upgrade “Marshmallow” that is due to be released in the fall.
Apple won’t compete in that market, and it’s going to lose it before it gets a chance to move in. As with China, however, as incomes in Africa and India improve Apple may be able to convince people to buy an iPhone. That could take years, however.