Will the Android Oreo (Go Edition) Lunch Give Alphabet Inc an Edge?

Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google announced this morning that Android Oreo (Go Edition) is now available.

Source: Google

The new variant of Google’s mobile operating system is designed for low-end phones. Android Go is aimed directly at India, an emerging smartphone market where Google now has more users than in the U.S., and where growth opportunities to drive GOOGL stock are seen.

GOOGL Launches Android Oreo (Go Edition)

Today, Google announced the launch of Android Oreo (Go Edition). Optimized for entry level smartphones, Android Go is a full version of Google’s mobile operating system that will be installed on devices with low-end specs. Originally unveiled at this year’s Google I/O event, Android Oreo (Go Edition) is free for any manufacturer to use. The first devices with the OS installed are expected to hit store shelves in early 2018, in India.

What Is Android Go?

According to Google, Go is a fully functional build of Android that has been optimized to run on devices with just 512MB to 1GB of memory. In comparison, Google’s Pixel 2 smartphone — and most current flagship smartphones — has 4GB of memory to work with. The idea is that going forward, Go editions will be released in parallel with the current version of Android. So this first release is Android Oreo (Go Edition).

How does Google optimize Android Go to provide the same user experience as full-blown Android –including built in Android Assistant– in a much less capable smartphone? The company is using multiple strategies, including reducing the size of its own Go edition apps by 50% and fine-tuning Android performance to make it 15% faster on entry level devices. In addition, when using the Android Go version of the Chrome web browser, everything is run through a server at Google that compresses files before delivering them to the smartphone.

Google says Android Oreo (Go Edition) apps also have its data saver feature enabled by default, reducing the amount of mobile data used.

Third-party apps are likely to be the weak link in the Android Go scheme. After all, Android developers already have a serious fragmentation challenge to deal with when it comes to making apps for Android. That’s one reason why so many still prefer Apple Inc.’s (NASDAQ:AAPL) App Store, despite the much smaller iPhone market. Google has created a Go Play section in Google Play that highlights apps that have been optimized for Android Go devices, but time will tell how successful that is.

This Sounds a Lot Like Android One…

Android Oreo (Go Edition) does sound a lot like an earlier Google initiative called Android One. That also targeted inexpensive smartphones in emerging markets. The Verge explains the primary difference is that Android Go is an open version of Android that can be used by any manufacturer. Android One was a partnership between Google and a manufacturer to customize the Android experience on an affordable device and keep it up to date.

However, that direct collaboration is time-intensive and Android One devices have begun to get more expensive — like the Xiaomi Mi A1 announced in September.

Android Oreo (Go Edition) Implications for GOOGL Stock

Android Oreo (Go Edition) has an upside for GOOGL stock. It’s not a hardware play, like the Google Pixel smartphones. And the company gives away the operating system for free. But the massive ad money that drives revenue — and GOOGL stock — is based on users accessing the internet through Google services.

Android Go is aimed at India’s “mobile-first next billion users,” who will be going online using entry-level smartphones. With Android Go, Google is making certain that Android — and preinstalled, optimized Google apps including the Chrome web browser, YouTube, Google Maps and Android Assistant — are the services they will use. Android Oreo (Go Edition) is the first release in a campaign to capture that emerging market. It’s a strategic move to ensure ad revenue keeps flowing, and GOOGL stock keeps growing in value.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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