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At the end of the month, Google will charge a license fee in Europe for the Play Store and apps such as YouTube and Gmail to comply with the antitrust decision of the European Commission. Device makers will soon decide whether Google's use of services is worth it, while Android as an operating system will remain free to use. With these new conditions, the future of Android in Europe could change radically to become a lite version that retains the operating system, but offers fragmented alternatives to Google services that were once the cornerstone.
So what would it look like? The clearest example to quote is China, where Google is totally banned. Instead, each smartphone company (which is not Apple) uses a version of Android, but there are more than 400 application stores in China instead of the Google Play Store. Of the approximately 400 stores, 10 represent the bulk of the country's market share, including MyApp, 360 Mobile Assistant and Baidu Mobile Assistant from Tencent. The Play Store (downloadable via a VPN) just manages to climb to the top of the list, constituting a meager 3% of the facilities of the App Store installed in July, according to the Newzoo market analyst group. .
Of course, the comparison between Europe and China still presents a huge difference. Much of China is still developing and the country is ruled by an authoritarian regime. Many of its most profitable technology giants receive large government subsidies and often self-contained content to satisfy the wishes of the authorities. But the basic idea, which is to have many hubs to turn to for new applications and services to download, remains the same. In China, a fragmented ecosystem of application stores creates all kinds of different conditions.
Not all app stores are equal
In China, each application store has a different rating system and a different user community that review an application. Different stores also present the applications in a different order, with their own means of prioritizing the applications to be highlighted or displayed in the search results. For example, Tencent's MyApp and 360 Mobile Assistant contain sections listing the most popular apps among men and women. The huge fragmentation of Android in China, which varies by smartphone maker, means that the average Chinese user uses nearly 40 apps on his phone per month and about 11 per day, according to App Annie. These figures are slightly higher than those of US and European users. They are also more likely to have a total of 100 apps on their phone.
In 2013, 25% of Chinese users said that the most important feature on a smartphone was its wide range of applications, reports Nielsen. The need for additional applications has even pushed Chinese smartphone companies to be among the first to offer 1 TB of storage.
Users download multiple stores for apps that they wish
Chinese users often choose the app stores by choosing what suits them best, which means that they often use what is preinstalled on their phone. China's leading smart phone manufacturers – Huawei, Oppo, Vivo and Xiaomi – all include their own app stores on their devices. In the gray market, where phones are sold without an official license, they are sometimes preinstalled with less popular app stores, which largely explains the fragmentation of market share. According to Nielsen, only 15% of Chinese users in 2012 bought their phones directly from the manufacturer.
Some apps also receive better service updates based on their developers. Those who use Tencent's famous WeChat app, for example, will probably also want to download Tencent's Myapp, where the latest version of the mainstream social media app is released before being available in other stores.
How application developers juggle with their options
At the same time, due to the large number of app stores, developers in China have to make a request to each app store if they want their product to be included. For example, Huawei's application review guidelines require developers to provide a record, documents, localized version of their application and follow strict content guidelines. Although the process does not differ significantly from one application store to another, reaching a majority of the population takes much longer than simply signing up for the Play Store. The company has developed numerous marketing agencies in China and channels partnerships that allow application developers to facilitate the distribution of their applications.
Since requesting that an application be included in an application store can be time consuming, some developers limit their options to stores offering better benefits. Baidu Mobile Assistant, for example, proposes to display applications prominently in search results. The 360 Mobile Assistant, meanwhile, is an old favorite who has become the number one or two of the charts for four years. But it was also designed by Qihoo 360, a company that produces security software that some have called computer blocking software.
In China, app stores also absorb a larger share of developer profits compared to the Apple App Store or Google Play Store. While 30% of in-app purchases typically go to the App Store, China's mobile phone provider also takes 30%, unless users pay via WeChat Pay or Alipay. However, paid apps in China are rare and the Xiaomi app store is one of the few to be. In Europe, the landscape will probably be better regulated to limit costs to more reasonable amounts.
How things could be played out
Strip Android out of its bundled Google services could leave a lot more space to competitors. Without basic applications such as Google Maps and YouTube integrated, the competitive landscape in Europe could simply be opened up so that domestic companies can directly engage with consumers or through partnerships with OEMs.
Ingenious users could also find a way to access Google services, as they do in China via a VPN. Or maybe the device makers will simply pay the price, knowing that there are still no viable local alternatives like YouTube, the Play Store and Google Maps.
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