Indian ecosystems – Virgin territory.

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Using Google as a stop gap likely to have a disastrous effect.

• Many players are using Google as a stop gap in India while they get their own ecosystems ready but this sets a dangerous precedent.
• I believe that there is a rising danger that the Indian market may end up as another Apple / Google duopoly with very little value being created for the home grown companies.
• As developed markets become increasingly saturated, the ecosystems are looking to emerging markets to keep the growth going and India is a prime target.
• Although, China is a more mature and higher value market, only Apple really has a chance there as its proposition is not dependent on its services.
• In China, Google has big problems as its services are almost entirely prevented from operating on the mainland meaning that its ecosystem is virtually non-existent.
• Consequently, Google has turned its eye to India which already has 941m mobile users but is only just getting going when it comes to smartphones.
• Google is pushing hard with its Android One reference design and it is getting plenty of help from the handset makers, Xiaomi, Micromax and Cyanogen are all helping.
• India is virgin territory when it comes to users as the vast majority of all users will only access the Internet from a mobile device.
• This means that at the moment they have no ecosystem preference or legacy attachment from the fixed Internet.
• The problem for Xiaomi and Micromax (both of whom have ecosystem ambitions of their own) is that they are currently seeding the market with Google services.
• Micromax was supposed to be developing its own ecosystem (Micromax Yu) powered by Cyanogen’s software on its devices but it looks like a lack of technical readiness has forced it to use Google Mobile Services instead.
• In a similar vein, Xiaomi, whose Chinese ecosystem (MIUI), is not relevant in India is also using Google in India.
• I think that this is highly damaging to their ambitions
• This is because they are encouraging users to discover and to begin liking Google meaning that by the time their own offerings are ready, users won’t want to switch.
• This leaves Micromax, Xiaomi and any other Android handset maker in India with the prospect of being a commodity in what is likely to be the most price competitive market of all.
• Hence, the only winner here is Google, which is in a good position to grow its ecosystem and earn greater revenues from monetising user data.
• Consequently, the outlook for a home grown ecosystem in India is looking increasingly precarious, leaving Apple and Google to reap most of the benefits.
• Google and Microsoft remain my two top choices in the digital mobile ecosystem.