One for All. A Tough Week for Feature Phones.

Google and Microsoft Accelerate Smartphone Spread

If it’s not One thing with Google, it’s another.

Sales of feature phones have been fading fast, so it was no surprise that smartphone sales surpassed them during 2013 (see chart below, from LTE Phones to Account for over Half of Global Shipments in 2018). The pace is about to accelerate as Google, Microsoft and others push smartphones and their underlying services to lower prices and more people. This is about the future of computing platforms and the introduction of cloud-based services.

Google held its I/O developer conference yesterday, introducing Android One, a software and hardware reference design for low-cost smartphones and with the potential to make smartphones the most standardised consumer electronics product ever. Android One phones will be dual-SIM, have a 4.5-inch touch screen, an SD card reader and FM radio, and will run a Google-controlled version of Android with auto updates. This is clearly an effort by Google to limit the forks of Android when many Android-based smartphones are rolled out without Google services altogether. Indian handset manufacturers Micromax, Karbonn and Spice will be among the first to make Android One-based smartphones.

On Tuesday, Microsoft introduced the Nokia X2, its own Android-based low-cost smartphone. The €99 X2 is also dual-SIM (a vital feature in some developing markets), has a 4.3-inch touch screen, a five-megapixel camera and runs on a dual-core 1.2 GHz Qualcomm Snapdragon processor. It comes with Microsoft services including Skype and OneDrive. We can question the usefulness of these cloud-based services to many potential buyers given the lack of LTE and the limited availability of Wi-Fi in some markets but, like Google, Microsoft is future-proofing the phone as it expands its brand.

Feature phones such as Series 40-based handsets are being pressured by lower-cost smartphones and fantastically inexpensive basic phones. Microsoft and Google aren’t pushing smartphones to completely unprecedented prices, but these new devices are impressive in their specifications.

This year will be important for smartphone proliferation in developing markets, and a tough year for feature phones. Smartphone platforms are about to dominate as the computing operating system of choice in many countries.