Business: Android in China The lure of the mobile kingdom
Re-entering China will be hard for Google, but it may still try.
“It's all speculation.” Google's reaction to reports that it is in talks with officials and handset-makers to launch an app store in China is no surprise.Such a move would be a high-profile reversal: in 2010 the firm shut down most of its Chinese operations or shifted them to Hong Kong in reaction to government demands to censor online-search results.Even so, on September 8th the firm did take a tentative step back into the country: Motorola, its former handset unit (now owned by Lenovo, a Chinese firm) , launched the first smartwatch supported by Google and powered by its operating system, Android, that understands Chinese voice commands.It would be remarkable if a company like Google (whose parent firm's chairman, Eric Schmidt, is a director of the Economist Group) were not carefully considering the pros and cons of going back into China in a bigger way.
Although its growth has slowed, the country is now the world's biggest mobile-device market, with more than 400m smartphones expected to be sold there this year.Having no presence in China is a serious handicap in the battle with other tech giants, notably Apple.Google's absence from China is threatening its control of Android.Elsewhere, the operating system usually comes bundled with the firm's mobile services, such as the app store and digital maps.Handset-makers which want Google's stamp of approval have to install these services on their devices and present them prominently.
In China, since those Google services are unavailable, manufacturers use open-source versions of Android, which they can adapt as they see fit.As a result, the country's mobile market is much more fragmented, but also more competitive and innovative.It boasts hundreds of app stores.Handset-makers, in particular Xiaomi, differentiate their products by, among other things, integrating them with local mobile services.Messaging apps such as WeChat have evolved into rival platforms which host many services similar to Google's.
Not only are all new Android phones sold in China powered by a version of the software which is not certified by Google; the Chinese model is also now spreading to other developing countries, in particular India.Xiaomi, for instance, has big plans there.Teaming up with a big Chinese handset-maker, such as Huawei or ZTE, could help Google to stem the non-Google Android tide—not just in China, but everywhere else.Yet becoming a force in China's mobile market would be a struggle—for the same reason Microsoft has failed to make it big in smartphones, despite spending billions.It is very hard to establish a mobile ecosystem of developers and handset-makers in a market where other firms—not just Xiaomi, but Baidu, Tencent (which operates WeChat) and others—are entrenched.
There is still the small matter of reaching an accord with the Chinese government.According to The Information, the website that first reported Google's putative app-store plans, the firm would block apps deemed objectionable and limit certain features, such as location information.Even then, the government might prefer to keep Google out of China—after all, its absence has been a boon for local champions.“We are open to newer approaches. We'll have to wait and see,” Sundar Pichai, Google's new chief executive, said when asked about China recently.The firm whose motto is “Don't be evil” may be unable to resist returning to a country that is no more virtuous than when it left.