Do Chinese phone brands credibly challenge Google?

Published February 10, 2020
Manufacturers rely on Android to run devices but use domestic app stores inside China, where Google is blocked. — Reuters/File
Manufacturers rely on Android to run devices but use domestic app stores inside China, where Google is blocked. — Reuters/File

Chinas top handset makers are answering Washingtons unintended call, and that could hurt Google Huawei, Oppo, Xiaomi and Vivo, have joined together to build a shared platform to rival the Play store, Reuters reported earlier this month.

It could threaten some 5 per cent of the topline at the $1 trillion parent Alphabet, and the de-facto US dominance of Android.

Manufacturers in the Peoples Republic rely on Android to run their devices but they use domestic app stores inside China, where Google services are blocked.

For overseas models, Chinese manufacturers have continued to rely on pre-installing Play, allowing them to offer users the most popular social apps like Facebook and WhatsApp that are not available for download in China.

But President Donald Trumps clumsy embargo in May on Huawei highlighted that Washington can restrict access to Play.

The four Chinese handset makers, which together shipped around 40pc of the worlds smartphones in the fourth quarter of 2019 according to IDC, will now let foreign app developers like Facebook upload and update software to all the respective stores, through the new platform, with a single click, as it were.

Thats an attractive proposition for developers, especially those interested in rapidly expanding emerging markets - precisely where the so-called Global Developer Service Alliance will kick off: in India, where Xiaomi has over a quarter of the market, Indonesia and Russia.

This method is also easier than convincing Facebook and the rest to write new code for homegrown Android alternatives like Huaweis Harmony operating system.

Google does not break out revenue from the Play store, but an analyst at Sensor Tower estimated it generated around $8.8 billion in commissions for its parent Alphabet in 2019, over 5pc of the total.

Play also helps Google push through its other apps like Chrome, Gmail and Maps that contribute more to the bottom line.

If the Chinese consortium decides to compete on price similar to the way Chinas state-owned UnionPay competes with Visa and Mastercard overseas Chief Executive Sundar Pichai could end up in a long fight for share with an alternative app universe.

And the US government will have lost another technology lever it can use to contain Chinese companies.

This is a Reuters Breakingviews column by Pete Sweeney. The opinions expressed are his own.

Opinion

Editorial

Punishing evaders
02 May, 2024

Punishing evaders

THE FBR’s decision to block mobile phone connections of more than half a million individuals who did not file...
Engaging Riyadh
Updated 02 May, 2024

Engaging Riyadh

It must be stressed that to pull in maximum foreign investment, a climate of domestic political stability is crucial.
Freedom to question
02 May, 2024

Freedom to question

WITH frequently suspended freedoms, increasing violence and few to speak out for the oppressed, it is unlikely that...
Wheat protests
Updated 01 May, 2024

Wheat protests

The government should withdraw from the wheat trade gradually, replacing the existing market support mechanism with an effective new one over the next several years.
Polio drive
01 May, 2024

Polio drive

THE year’s fourth polio drive has kicked off across Pakistan, with the aim to immunise more than 24m children ...
Workers’ struggle
Updated 01 May, 2024

Workers’ struggle

Yet the struggle to secure a living wage — and decent working conditions — for the toiling masses must continue.