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As Android succeeds in China, Google fails

BusinessAnalysis
by Ryan Whitwam, 18 Dec 2012Analysis
As Android succeeds in China, Google fails

By all accounts Google is riding high on the success of Android. More than three-quarters of all new phones shipped are running Google’s mobile operating system, and that gives Mountain View access to a ton of user data, and avenues to promote its services. However, Google’s business decisions over the last few years could be coming back to haunt the company as China becomes the world’s largest mobile market. Even though Android is big in China, its benefit to Google is minimal.

Google’s Chinese Android problem is multifaceted, but most of the concerns stem from the search giant’s avoidance of mainland China. It was three years ago that Google surprised everyone by closing down its Beijing offices and discontinuing its .cn search domain. This was seen as a principled stand – Google didn’t like the way China filtered content and regularly interfered with its services.

If Android had been a force in mobile computing at the time, Google might have reconsidered. Dropping out of China doesn’t mean Android won’t continue to find its way into the hands of Chinese consumers – it just means Google won’t be involved. Plenty of companies are taking Android, which is open source, and modifying it to suit the Chinese market, sans Google.

Companies like Xiaomi have gone so far as to completely fork Android, building variants for use in China. As much as we get annoyed with OEM skins that change the experience and cause us grief, it’s nothing compared to what happens to Android in China. You could make the argument that Android is open, and Google should have seen this coming, but I doubt the company expected an entire nation to take the Google out of Android.

Indeed, the overwhelming majority of Chinese Android handsets have not a hint of Google on them. Even search services are swapped out for Baidu, which powers search on 80 per cent of Android handsets in the country. None of Google’s Android-oriented services are reliably accessible in China thanks to the increasingly troublesome Great Firewall. There is very poor Google Play access, Gmail is frequently blocked, and YouTube hasn’t been accessible in a very long time. Without search and services, Android doesn’t make money for Google.

In a darker twist, Google’s absence from the Chinese mobile market has resulted in dozens of replacement app and content stores appearing online to service Android users. These dens of anarchic malfeasance are the number one source of Android malware in the world. Almost every time you hear about some new Android threat, it’s circulating in these third-party ecosystems. You could say that Android’s security PR problems are largely of Google’s own making.

Microsoft, Apple, and untold numbers of Chinese companies are willing to do what it takes to operate in China. Google might have a clear conscience having avoided that situation, but it has ceded a very large market. Android is the leading mobile platform right now, and that makes it the key to Google’s future. It’s a classic catch-22 – Google doesn’t want to be beholden to the Chinese government’s regulators and censors, but staying out of China means letting Android run wild. Neither option is a good one.

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