Earlier this year, the European Commission planted a record breaking $5 billion fine on Google over antitrust charges. The EU took issue with Google’s use of pre-installed apps and services on Android smartphones, which stops consumers from seeking out alternatives and thus prevents competitors from rising up. Google is appealing the fine but the company is also preparing new licensing charges for OEMs too.
Google is going to comply with the EU’s demand that it unbundles the Google Android app package. This in turn will allow OEMs to skip Google’s services in favour of alternatives. However, the ad-revenue from these apps and services were also what supported Google’s Android development, so the company is going to need to rethink how it generates that revenue.
According to The Verge, Google’s plan going forward will be a licensing program for Android. If OEMs decide to use Google’s app-suite, which includes the Play Store, Chrome and other services, then they will have to pay a fee, which could equate to as much as $40 per device. This pricing would be adjusted based on country and even the pixel density of the display.
According to the report, Europe is split into three tiers for this licensing program. OEMs selling in the UK, Germany, Norway, Sweden or the Netherlands will have to pay more per device to use Google’s apps and services out of the box. So a company like Samsung would pay $40 per device for a flagship phone in a top-tier country but would only pay $2.50 per device for a low end phone in the bottom tier.
Ultimately if this goes ahead, we could see Android flagships rise in price in Europe as many OEMs utilise the Play Store and other pre-installed Google services.
KitGuru Says: Switching to a licensing fee makes sense in order for Google to keep its services prevalent but the costs seem surprisingly high. It would be odd to suddenly be in a situation where an Android flagship isn’t guaranteed Play Store access.