Senior Google executives who are guiding Google’s Android strategy said today that consumer spending on apps on Google Play is growing at a rate faster than Android activations. This is considerable when you consider Google’s mobile operating system Android has achieved 500m device activations so far with 1.3m smartphones being activated per day.
The company also revealed that payouts to developers quadrupled in the past year.
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Google’s presence at Mobile World Congress is a decidedly understated affair compared with its massive presence at the show in 2012.
In a meeting room hidden away discretely with no branding to identify it was a Google booth, the few journalists who were invited to attend a round table with the head of Google Play Jamie Rosenberg and the vice president for engineering for Nexus Hiroshi Lockheimer nodded at one another as they assembled outside.
Inside, a table with Nexus 10 and Nexus 7 tablet devices and a Nexus 4 smartphone and a banner behind Rosenberg and Lockheimer emblazoned with the Google Play logo were all that indicated this was a Google booth.
Rosenberg explained: “Last year we decided that 2012 was going to be an important year for Android in tablets and we invested in our ecosystem. It wasn’t just about design but everything behind the ecosystem in terms of services and content.”
He said that investment is continuing. Google Play now sells digital magazines and books in 12 countries and music in 11.
“All of this happened in 2012 and this was a big push for us and it will continue in 2013. We’ve invested in our Play store, payment systems, carrier billing which is available to half the Android users across the world.
“We also opened the distribution channel for Nexus devices via Play in eight countries around the world.
“We can now reach consumers directly with lead products. So a lot of things we talked about as being important happened in 2012 and we are pleased with the progress.”
Lockheimer said that the launch of the Nexus 7 tablet computer was a game-changer at just US$200. “The price was probably the number one feature. It was a high spec tablet at a very affordable price.
“We started with the Nexus 7 and Jellybean in June and in October we followed it up with the Nexus 4 and Nexus 10 through our partnerships with ASUS, LG and Samsung.”
Google Play and hardware strategy are symbiotic
He said that the Google Play strategy to drive content to the devices worked neatly alongside the hardware strategy.
The project aimed at making the operating system and user interface more fluid was code-named ‘Operation Butter’.
“Activations at this point are 1.3m devices per day, including the Nexus devices, but of course there are a lot of other devices from manufacturing partners. We are now at 500m Android devices out there and there are 700,000 apps in the Play Store.
“In terms of the software development kit for developers we knew straight away that our strategy wasn’t going to be just one device or one manufacturer but multiple devices and multiple screen sizes and other capabilities. We wanted to leave it up to the developers what kind of apps they create. If it’s a gaming app that requires a high pixel rate for a large screen device, that’s the app developer’s choice.”
The Google Nexus strategy – create a beacon for the industry
Describing the Nexus strategy Lockheimer said that every time there’s a new Android OS release the plan is to come out with new hardware that exemplifies potential use cases and alliances with LG, Samsung, ASUS and others have been of critical importance.
“Those manufacturers have made it possible for us to build an end-to-ends product and what we want to do is make those devices a beacon for the industry. We want other manufactures to see what’s possible.
“It’s no coincidence that we launched a US$199 Nexus 7 – not long after new devices in that size started cropping up in the market.”
I ask Lockheimer what’s in it for Google by creating such a successful OS but licensing it for free. According to IDC, Android accounted for 70.1pc of smartphones sold around the world in the fourth quarter of 2012.
“Part of it is altruistic, but it is important for us as a business to ensure people have access to the internet across desktop and tablets and smartphones and other form factors and provided we have a good search engine and they use our other products and yes that will lead to other opportunities, including advertising.
“For this year we will continue to work on our operating system and we will continue to innovate.”
He said a good idea of what to expect in the year ahead is the addition of new features like Google Now.
Rosenberg added: “The other thing you’ll see from us this year is we will thread together things that might otherwise live in silos – movies, games and more – we’ve proven that all the services work and now we’re going to work on tighter integration.”
In terms of the progress of the Play Store, Rosenberg said he was pleased with the momentum so far.
“We are investing in the experience itself, adding payment options for consumers in addition to credit cards and helping developers manage their businesses.”
Without revealing how much Google has paid to developers so far, Rosenberg did say: “Our payouts to app developers quadrupled in 2012 over the previous year.
“Consumer spending in Google Play grew faster than Android and that says a lot considering how fast the Android base has grown,” Rosenberg said.