On September 15, 2015, Google unveiled its cost-effective new Android One smartphone across India. Google is banking on the bet that by flooding the world's fastest-growing smartphone market with a device that costs just $105 dollars (or 6,399 rupees), Internet access — and therefore, use of Google's suite of products — will skyrocket across India and the rest of the emerging markets of Asia.
India: Ripe for a Mobile IT Revolution
According to the Economic Times, by 2020, two out of every three mobile connections will be for smartphones, and four out of every five smartphone connections will come from the developing world. Currently, India is the fourth-largest smartphone market in the world, with 111 million smartphone connections in the last quarter of 2014, closely trailing China, the United States and Brazil.
With a population of more than 1.2 billion people, India is the largest democracy on Earth and one of the world's fastest-emerging economies. According to statistics from McKinsey and Company about the Internet landscape in India, the country is home to about 120 million Internet users — the third largest base in the world — yet 90 percent of the country is still not connected.
Part of the reason can be found in India's built-in obstacles to connectivity.
Incomes in India are comparatively low, meaning the larger populace doesn't have the buying power required for iPhones or similar devices. On top of that, the cost of handsets is higher on average there than in other developing countries. But perhaps the biggest impediment is that in India, it is not customary for carriers to subsidize the purchase of a device. In the United States, for example, a $700 phone will only cost the purchaser around $200 upfront when they sign a contract. In India, the phone costs what the phone costs.
Can Android One Unlock the Floodgates in India?
The McKinsey report stated that India is poised to jump the line to become the second-largest Internet-user base in the world in 2015, totaling between 330 and 370 million users, which would be the fastest incremental growth of any country on Earth.
What could precipitate such a huge leap in Internet use? A mass influx of cheap smartphones.
McKinsey states, "In an evolution pattern unique to India, users who access the Internet only through a mobile ... device will constitute around 75 percent of new users and 55 percent of the aggregate user base in 2015, leading to increasing demand for content that is optimized for a small screen."
This mobile-only Internet explosion is poised to take place in India in 2015. Google releases a massive number of cheap, widely accessible smartphones at the end of 2014. Coincidence?
What India's Smartphone-Fueled Internet Boom will Mean for IT Globalization
India's current economic contribution to the country's GDP from the Internet (iGDP) is about 1.6 percent. That number could double to between 2.8 percent and 3.3 percent in 2015. That means that the new India — the one awash in affordable smartphones — has the very realistic potential to add 100 billion new dollars to its iGDP in just a few months.
In this new India, the country's Internet sector would suddenly be larger than its education sector and its healthcare sector. There is the potential for the direct and indirect creation of six million jobs right away, with another 16 million as the ripple effects permeate into markets that aren't Internet specific.
All this in a single year. It is impossible to imagine a scenario in which all of this growth could be contained to one country — especially since it will be built on the back of Internet expansion, which is rooted in connectivity.
India, China, Indonesia and Greater Asia: The Hub of the Coming IT Boom
Research shows that the Internet has now reached one out of four people in Indonesia, mostly in cities. What is more remarkable than the growth, is the method of delivery. Prior to 2012, the majority of Indonesians who had online access logged onto the web at Internet cafes. Now, however, Indonesia has joined India as a majority mobile-only nation, meaning that the vast majority of the country's Internet-connected population access the web only from their mobile device — they don't also own a computer.
Since three quarters of the nation still offline, that puts anyone who could flood the country with affordable smartphones in a position to dominate the Internet market of Indonesia, which is the fourth-largest country in the world behind China, India and the United States.
Google is targeting the largest 40 countries, market by market, for release of Android One. After India, this conveniently makes Indonesia next on the list for a major release.
It is no secret that China is a global economic powerhouse. A CNBC report points out that just 20 years ago, there were almost no mobile phones in China and fax machines had to be registered with the local government because there was no such thing as an Internet connection. Today, most business people in China have at least two mobile phones. Like the rest of Asia, China is home to more mobile phones than personal computers. What do those phones run on? Google's Android operating system dominates the overwhelming majority of the market.
In short, mobile Internet will be the driving force behind an IT revolution that is taking place in the largest countries in Asia and — with the exception of the United States — the world. Mobile is driving the Internet in those countries, and Google is the 800-pound gorilla on the mobile block.
The Economist refers to the coming year as "the reckoning" for Western businesses, which have invested heavily in India, Indonesia and other emerging nations in Asia over the last 20 years. The mobile Internet-based economic revolution is on the horizon for 2015, and it is poised to launch millions of Indians, Chinese and Indonesians into the middle class. Western businesses — long known merely for outsourcing jobs like tech support to cheap Indian labor — will now be competing for the buying power of the new middle-class multitudes.
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