Google opens the retaliation mode, what is the impact of Chinese mobile phone manufacturers?

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 Google opens the retaliation mode, what is the impact of Chinese mobile phone manufacturers?


After receiving the ticket from the European Commission, Google finally launched the charging mode while appealed. According to Googles official blog, Android phones and tablets, launched in the European Economic Area (EEA, including 31 countries), will gradually adopt new fee agreements starting October 29, 2018. It is reported that the authorized cost of a device can reach up to US $40.

There are two key points in the new agreement. One is that if you use Google Search and Chrome to download Googles various application suites, each device will have to pay a licensing fee. However, if vendors are willing to pre-install Google Search and Chrome browsers (not exclusively), Google will offer new business agreements, meaning that pre-installers will still benefit.

Second, the Android system will remain free and open source. Google once said it might charge for Android in response to the penalties listed by the European Union. Now it seems that Google is reluctant to affect the ecosystem of the Android operating system by charging.

Next, Google will spend several months coordinating new pricing agreements with its partners. At present, it seems that the main impact is the European business of mobile phone and tablet computer manufacturers, China and other regional markets are not affected.

On October 29, Liu Xingliang, Dean of DCCI Internet Research Institute, told 21st Century Economic Reporter: For Android users in China, there is no impact at all. Because Android is still free, Google charges for application Suites (Play stores, search, maps, mailboxes, etc.). All these Chinese users do not need it.

Googles counterattack

In July, Google received a 4.3 billion (about 5 billion) sky-high fine from the European Union, which argued that Google had monopolies based on Android, such as paying manufacturers and operators to make Google search the exclusive search tool on products, and requiring manufacturers to pre-install Google search and Chrome on Android devices. Browsers and Google do not allow manufacturers to sell mobile devices with Android branching systems developed by competitors.

Googles search Chrome browser is an important source of profit for Google, and it also provides free open source funding for operating systems such as Android. According to EU requirements, Google will not require mobile phone manufacturers to pre-install software, in order to make up for the revenue, Google decided to charge software licensing fees in the European Economic Zone.

In terms of specific charges, according to The Verge, charges in the EU countries will be divided into three levels, with the highest charges in the UK, Sweden, Germany, Norway and the Netherlands. In these countries, devices with pixel densities higher than 500 PPI would have to pay $40 to license Googles application suites, according to the pricing documents. 400 to 500ppi equipment will cost US $20, and less than 400ppi will cost US $10. In some countries and regions, for low-end handsets, the cost of each device can be as low as $2.50, depending on the country and the type of device.

How does the fee affect Googles ecosystem? Android ecosystem can be simply divided into Android operating system, Google service and GooglePlay. Through Google Play, Google integrates application ecology on Android, including search products such as Google Browser and YouTube. Of course, device vendors can choose not to use Googles apps, but YouTube, Gmail, and Chrome are so large that its hard to avoid them altogether. However, as a result of the new charging system, the terms of service have changed, and the relationship between the user system will be updated accordingly. Perhaps paid businesses can get more services, and Googles service will also be differentiated.

Google, on the other hand, will be welcoming more competitors at the service and application levels, although it will not compete with Android, but other service providers can do their own application stores, such as China is doing their own. From the perspective of upper-level applications, mailboxes and browsers have substitutes that introduce new competition in these areas.

Static impact of mobile phone manufacturers

In addition to some impact on Google ecosystem, many commentators believe that mobile phone manufacturers will suffer from price increases. But industry insiders say handset makers may not actually have to pay for the fee, because Google also offers separate agreements to cover some or all of the licensing fees of companies that choose to install Chrome browsers and Google searches on their devices. Assuming the average licensing fee for an Android device is $20, Google would need 250 million units to recover a $5 billion fine.

Samsung, Apple and Huawei have contracted out the top three in terms of sales in the European mobile phone market, and mobile phone manufacturers are mostly watching their changes.

Samsung shipped 15.2 million smartphones in the European smartphone market in the first quarter of 2018, with a market share of 33.1 percent, but shipments fell 15.4 percent year-on-year, followed by Apple, which shipped 12.2 million units, down 5.4 percent and had a 22 percent market share. Huawei, ranked third, shipped 7.4 million units, up 38.6% year-on-year, with a 16.1% market share. Fourth and fifth were millet and NOKIA, and the city accounted for 5.3% and 3.5% respectively.

Googles fee terms are currently only implemented in the European Economic Zone, which has little impact on Chinas domestic mobile phone companies. Li Rui, CEO of Novotel Consulting, told 21st Century Economic Reporter on October 29: This is the beginning, and it has no impact on domestic brands and the Chinese market. In fact, it is very difficult for Google to restrict domestic brands, only through the market side to restrict, but I do not believe that Google can restrict the activation of products in China. The licensing price is normal, but the most important thing to watch out for is the rising cost of components due to political and macroeconomic factors.

In terms of the proportion of mobile phone software costs, Li Rui said: The cost at the OS / UI level is difficult to say, depending on the brand-related R&D investment, it is also difficult to convert to each mobile phone. At the app level, the manufacturer will have input as well as income. The third-party app implantation income of a big brand mobile phone is about 100-300 yuan. In this regard, for high-end mobile phones, 40 dollars, less than 300 yuan licensing fees are not high, low-end mobile phones or affected, but as mentioned earlier, Google will also classify the charges for mobile phones. Since this year, Huawei, OPPO, vivo, millet and other mobile phone manufacturers have actively expanded the European market, of which Huawei has the deepest foundation in Europe, Android charges will have a certain impact on product pricing, when its own prices are high and Huawei is in the ascendant overseas, the impact will not be great, authorization fees and the growing sea. The cost of external marketing is nothing. Li Rui said. Source: twenty-first Century economic report editor: Wang Zheng _NN7526

In terms of the proportion of mobile phone software costs, Li Rui said: The cost at the OS / UI level is difficult to say, depending on the brand-related R&D investment, it is also difficult to convert to each mobile phone. At the app level, the manufacturer will have input as well as income. The third-party app implantation income of a big brand mobile phone is about 100-300 yuan. In this regard, for high-end mobile phones, 40 dollars, less than 300 yuan licensing fees are not high, low-end mobile phones or affected, but as mentioned earlier, Google will also classify the charges for mobile phones.

Since this year, Huawei, OPPO, vivo, millet and other mobile phone manufacturers have actively expanded the European market, of which Huawei has the deepest foundation in Europe, Android charges will have a certain impact on product pricing, when its own prices are high and Huawei is in the ascendant overseas, the impact will not be great, authorization fees and the growing sea. The cost of external marketing is nothing. Li Rui said.