Google’s move to acquire Taiwanese smartphone maker HTC’s engineering team as well as some of the IP for its Pixel portfolio for $1.1 billion could come as a threat to Apple’s iPhone in India, which has taken long to establish its leadership in the premium segment in India.
While Google is determined to bolster its hardware portfolio with the move, the tech giant could gain big with this strategy in India, where it is seeing market share being taken away by iPhone in the smartphone segment priced above ₹30,000-35,000.
According to CMR Research, iOS has nearly tripled its market share in the premium segment in India from around 15 per cent in the first quarter of 2012 to 40 per cent as of second quarter of 2017.
The challenge has been even more compounding for Google’s Android platform since Apple is now offering five generations of iPhones in India, which gives it a portfolio ranging from ₹15,000 for the iPhone 5S to over a lakh for the upcoming iPhone X.
In the ₹50,000 plus price category, Android faces an even bigger challenge where iOS commands 50 per cent share, while the rest lies mostly with Samsung.
“In the ₹50,000+ segment, there were Sony, HTC, Samsung, Google Pixel, iPhone and Samsung. This year, the competition is only between iPhone and Samsung. If someone has preference for Android, the default is Samsung. Despite Google’s best efforts, Google Pixel didn’t do well in India,” said Faisal Kawoosa, Principal Analyst Telecommunications & ESDM, CMR.
This points towards Google’s high dependency on just one manufacturer to build its brand in the premium handset market. While Samsung has been far ahead of Apple in terms of offering new features and design, the consistent and smooth interface that’s been the backbone of iPhone’s success is far from real in the overall Android ecosystem today. “With tighter control on Pixel, Google will now focus on making the experience in that segment equivalent of the benchmark – iPhone and start evolving an ecosystem of services and applications around Android. That will keep Android ticking in this segment and help Google achieve its objective of delivering futuristic technologies and applications through Android,” Kawoosa said. Moreover, as the world moves towards virtual reality and augmented reality, Apple has been able to distinguish itself with the launch of iPhone X that has raised the bar in the mobile device-based machine vision AI.
“We believe HTC’s Pixel team and IP rights is to further Google’s position in the fields of AR and VR with an in-house hardware team. This is similar to Motorola’s acquisition (for its IP) back in 2011 and preferential partnership with Samsung from 2010 through 2014. Both the moves ensured the deeper integration and faster adoption of Android OS and, helped Google’s Android compete with Apple’s iOS,” said Jayanth Kolla, Founder and Partner at Convergence Catalyst.
After years of ignoring the Indian market, Apple is now extremely aggressive in the country, which is also the fastest growing market for them as well the second largest mobile phone market in the world. If Google has to beat Apple in its game, it will have to regain its market share in the premium segment or else iOS will soon be the default option for all premium buyers in the country.