Google charging Android device makers up to $40 per phone to install apps
Google's recent EU ruling-driven rule changes for licensing access to the Google Play Store and the company's other apps to Android devices could cost some vendors as much as $40 per unit, according to internal documents, but the high fee could be significantly reduced down or eliminated entirely if Google's clients preinstall specific apps onto European smartphones.
Google announced on Tuesday it will be updating the terms of licensing agreements it makes with Android device producers to allow them to pre-install the Google Play Store and other essential apps on hardware shipping in Europe. The move, to appease an antitrust ruling by the European Commission, means that the free licenses will cease in favor of paid versions.
According to documents received by The Verge, the fee schedule indicates the cost per device could be as high as $40 in order to install "Google Mobile Services," a selection of core Google apps that includes the Google Play Store, for devices activated on or after February 1, 2019.
EU countries are split into three tiers, with the highest consisting of Germany, the Netherlands, Norway, Sweden, and the United Kingdom. For these areas, smartphones with a screen pixel density of 500ppi or more will need to pay $40 to license the apps, reducing to $20 for between 400 and 500ppi, and $10 for sub-400ppi displays. For other tiers, the cost per device could reduce down to $2.50.
Tablets have a more even pricing scheme that is the same across all of the affected countries, charging as much as $20 per device. While vendors would be able to negotiate deals with Google, a source suggests there would be little in the way of variance from what is detailed in the schedule.
The source also suggested that separate agreements would be offered for vendors installing Chrome and Google Search on their products, which could lower the fee or, in some cases, remove it entirely.
Firms who do not pre-install Chrome on their hardware and add it to the home screen dock could also lose another source of revenue, as they would not be eligible for search revenue sharing when users use Google. The revenue sharing incentive has been available for quite some time, and in this case would be useful for vendors to keep using, in order to cover part of the cost of the app suite licensing fees over time.
Google's changes were made following an investigation by the European Commission into its app licensing practices, where the company required vendors to pre-install Google Search and Chrome as a condition of accessing the Google Play Store. Google also allegedly paid major device producers and carriers for exclusively pre-installing the Google Search app.
The Commission fined Google $5 billion, and demanded changes to the licensing scheme within 90 days. The regulator believed Google used Android "as a vehicle to cement the dominance of its search engine," effectively making it extremely difficult for other firms to compete on the Google-dominated platform.
Also as part of the changes, Google will be offering agreements to allow Search and Chrome apps to be installed non-exclusively, with competing apps able to be included on the same device, instead of the previous practice of requiring exclusivity. Other compatibility agreements will allow vendors to produce hardware using forked Android versions, while still allowing them to distribute Google apps.
Google announced on Tuesday it will be updating the terms of licensing agreements it makes with Android device producers to allow them to pre-install the Google Play Store and other essential apps on hardware shipping in Europe. The move, to appease an antitrust ruling by the European Commission, means that the free licenses will cease in favor of paid versions.
According to documents received by The Verge, the fee schedule indicates the cost per device could be as high as $40 in order to install "Google Mobile Services," a selection of core Google apps that includes the Google Play Store, for devices activated on or after February 1, 2019.
EU countries are split into three tiers, with the highest consisting of Germany, the Netherlands, Norway, Sweden, and the United Kingdom. For these areas, smartphones with a screen pixel density of 500ppi or more will need to pay $40 to license the apps, reducing to $20 for between 400 and 500ppi, and $10 for sub-400ppi displays. For other tiers, the cost per device could reduce down to $2.50.
Tablets have a more even pricing scheme that is the same across all of the affected countries, charging as much as $20 per device. While vendors would be able to negotiate deals with Google, a source suggests there would be little in the way of variance from what is detailed in the schedule.
The source also suggested that separate agreements would be offered for vendors installing Chrome and Google Search on their products, which could lower the fee or, in some cases, remove it entirely.
Firms who do not pre-install Chrome on their hardware and add it to the home screen dock could also lose another source of revenue, as they would not be eligible for search revenue sharing when users use Google. The revenue sharing incentive has been available for quite some time, and in this case would be useful for vendors to keep using, in order to cover part of the cost of the app suite licensing fees over time.
Google's changes were made following an investigation by the European Commission into its app licensing practices, where the company required vendors to pre-install Google Search and Chrome as a condition of accessing the Google Play Store. Google also allegedly paid major device producers and carriers for exclusively pre-installing the Google Search app.
The Commission fined Google $5 billion, and demanded changes to the licensing scheme within 90 days. The regulator believed Google used Android "as a vehicle to cement the dominance of its search engine," effectively making it extremely difficult for other firms to compete on the Google-dominated platform.
Also as part of the changes, Google will be offering agreements to allow Search and Chrome apps to be installed non-exclusively, with competing apps able to be included on the same device, instead of the previous practice of requiring exclusivity. Other compatibility agreements will allow vendors to produce hardware using forked Android versions, while still allowing them to distribute Google apps.
Comments
If you think you have problem now, wait until you see the solution your government comes up with.
If you read beyond the first paragraph you'd find that there may be no charge at all depending on how "dedicated" they are to Google services.
The EU mandated changes. It's not something Google would have chosen to do without the insistence and fines from the EU Commission.
Hurts competition? No, there are more folk making Android phones than you can shake a stick at.
Hikes prices? No, these things were getting cheaper by the minute.
Prevents companies from entering the market? They're not making any money, but no one's stopping them.
So now consumers are getting the same crappy phones at higher prices?
Google now needs to monetize the part of its services which device makers really need (i.e. Play Store accessibility) directly by charging for it. On the flip side, it might need to pay device makers to pre-install the parts which device makers may not need as much, but which Google really needs to have on Android phones in order for Android to be a major profit driver for Google (i.e. Google Search and Chrome). The key, when it comes to compliance with the Commission's decision, will be that those things be separate transactions. For instance, device makers will have to be allowed to license the Play Store even if they aren't willing to pre-install Google Search and Chrome.
While this will represent an additional cost for device makers, it will also potentially open up a new (or strengthen an existing) revenue stream for device makers. Search and browser providers can compete for pre-installed status on various devices. Microsoft, e.g., might be willing to pay a substantial amount to effectively be the default search service on some devices. Or Google might have to pay more to retain that status.
I have no idea what an "EU ruling-driven rule change" is, and I'm fairly certain that "down" is the ONLY way you can "reduce" a price. It can't be "reduced up."
Umm, yeah, to your second point. It would have read just fine as “reduced or eliminated”.
In Eastern/Asian countries, they have a lot of cheap knock-off phones with really low-quality screens. Such phones would never survive in our marketplace here in the West. The user experience is well below grade, but "good enough" for people with limited budgets.
I seem to remember a phrase "shooting yourself in the foot".
If editors still existed in this world, one of them might have suggested something like this: "Google's recent changes to its licensing policy (dictated by an early EU ruling) could cost..."