KaiOS – The long arm of Google.

Google’s long arm extends into feature phones.

• The hopes of handset makers and operators wishing to escape from Google’s clutches in emerging markets have been dealt a blow as Google Ventures is leading an investment round in KaiOS.
• KaiOS is a feature phone platform that has managed to take 15% share in India on the basis of it offering better performance than Android at very low price points (see here).
• Until now KaiOS has been reasonably free of Google, offering an opportunity for operators and handset makers to offer their own services to users trying Digital Life services for the first time.
• The ecosystem battle in the rest of the world is pretty much over as users have become so accustomed to using the Google or Apple ecosystems that they will demand it on their devices before anything else.
• This has been instrumental into reducing Android handset makers into commodity box shifters and mobile operators into little more than packet pushers.
• To differentiate, these players need to offer services and functionality that new users will be prepared to try which is where KaiOS offers an opportunity.
• KaiOS now has momentum and as a result, developers are willing to make their apps available on the platform further adding to the viability of KaiOs for the low end.
• Hence, there is now the potential for a virtuous circle where more developers coming onto the platform means more traction which means more developers and so on.
• In regular Android devices, because Google controls both Android and Google Play, it is able to mandate that any device that uses its very popular app store has to have its other services front and centre on the device and set by default.
• This has made it almost impossible for Android handset makers and operators to differentiate their services leading to their effective commoditisation.
• However, at the very low end, there are still a lot of users who have not yet encountered Google services offering an opportunity for other Digital Life services to get a foothold.
• Unfortunately, with this investment, it is almost certain that Google’s services will soon be deeply embedded into KaiOS meaning that anyone wanting to use the software will also have to take Google services.
• Furthermore, I suspect that they will also be set by default meaning that new users will be ushered into the Google ecosystem long before any alternative is given much of a chance.
• I see this as bad news for handset makers and operators as any strategy they have to differentiate in emerging markets will now become much harder to execute.
• There is a window of opportunity left for an alternative ecosystem to establish itself amongst the Apple-Google duopoly, but this is one that Google is working hard to close as quickly as possible.
• KaiOS looks certain to quickly become Google ecosystem lite meaning that operators and handset makers are fast running out of time.

Reply to this post