Googles Android One Project Is Expanding Into Europe

By Markets Fool.com

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Source: Google

For Google investors, the company's mobile operating system -- Android is perhaps the most-important part of its growth strategy. Google's operating system (OS) is by far the dominant OS by market share worldwide, registering roughly 75% subscriber market share. In the important, rapidly growing Greater China market, Kantar Worldpanel estimates Android's market share at 72%.

Android's tremendous market share tends to be dismissed among the analyst crowd -- partially as a result of a downward trend courtesy of growth from Apple's iOS and also as a result of a fundamental misunderstanding of Google's business model. Consequentially, Apple's iOS has led Google's Android in both developer-focus and mobile OS revenue market share.

More recently, however, developers are moving more to Android as money follows eyeballs. Last year, mobile research firm Digi-Capital reported that Android reported more app revenue than Apple for the year, if you count its Android-forked Chinese revenue. Even so, counting App store revenues is still missing the big picture in regards to Google's big opportunity.

Enter Android One
Tuesday, Google announced it's expanding its Android One program to Europe, bringing the program from Asia through the transcontinental country of Turkey. The innovative program aims to bring Internet-connected smartphones to those currently without a device by partnering with handset vendors, mobile carriers, and others. On the Android One webpage, the company points out only 1 in 4 people own a smartphone -- and Google wants to increase this figure.

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As for the Turkey partnership, the company is pairing with carrier General Mobile in order to provide the handset. The biggest difference in General Mobile's phone versus prior offerings is the unit is actually a high-quality one. The phone is powered by Android-One partner Qualcomm's Snapdragon 410 with 2GB of RAM and a 5-inch high-definition screen. In addition, the unit supports high-speed 4G LTE versus 3G.

There's an ulterior motive here
Obviously, Google wants to shape local relationships and introduce new users into its Android ecosystem. That way, as developing countries grow in both population and spending power, the company's mobile app revenues within that market will also increase. Additionally, considering Android is open source, working with local participants increases the chances those markets will utilize Google's host of apps through Google Play's app store versus forked (non-Google) Android devices.

For Google, a company dependent upon its ad-based and search businesses, its App store revenue is nice but only complimentary. For example, last fiscal year Google reported $6.95 billion in its other revenues segment (that includes more than just Google Play revenues) -- a nice revenue haul, but only 10.5% of Google's total revenue during that timeframe.

Compare that to total advertising revenues that totaled $59.1 billion during that period, and you can see the company is an Internet-based ad-driven business model. Google recognizes this in their last annual report: "Fast search and high-quality ads matter only if you have access to the Internet. Right now, only a fraction of the seven billion people in the world are fortunate to be able to get online. That leaves out billions of people."

In the end, Google benefits more from the growth of Internet access and Internet browsing. And while I'm sure the company would prefer that browsing to come from Google's Chrome browser or from an Android phone, the company stands to gain regardless of the browser and operating system.

The article Googles Android One Project Is Expanding Into Europe originally appeared on Fool.com.

Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.