China's mobile giants have to compete with Google's Play Store: Sources

0
58

Shenzhen, China: China's Xiaomi, Huawei Technologies, Oppo and Vivo are working together to create a platform for developers outside of China where they can upload apps to all of their app stores at the same time. Analysts believe this should question the dominance of Google's Play Store.

The four companies iron out problems in the so-called Global Developer Service Alliance (GDSA). The platform is intended to make it easier for developers of games, music, films and other apps to market their apps in overseas markets, according to the experts with relevant knowledge.

The GDSA originally aimed to start in March, sources said, although it is not clear how the recent outbreak of the corona virus will affect it.

According to a prototype website, the platform will initially cover nine "regions", including India, Indonesia and Russia. Oppo and Vivo are both owned by the Chinese manufacturer BBK Electronics.

Oppo, Vivo and Xiaomi have confirmed that they have jointly developed GDSA to upload apps to their stores at the same time.

A Xiaomi spokesman said the alliance was not meant to challenge Google and denied Huawei's involvement in it, but Oppo and Vivo did not mention Huawei in their statements. Huawei declined to comment.

According to Katie Tower, an analyst at Sensor Tower, Google, whose services are banned in China, made around $ 8.8 billion in 2019 worldwide in the Play Store. Google also sells content such as movies, books and apps on the Play Store and receives a 30% commission.

Google did not respond to a comment request.

"By forming this alliance, each company will try to take advantage of the other in different regions, including Xiaomi's strong user base in India, Vivo and Oppo in Southeast Asia, and Huawei in Europe," said Nicole Peng, vice president of Mobility at Canalys.

"Second, it's time to build more bargaining power against Google," she added.

Together, the four companies accounted for 40.1% of global handset deliveries in the fourth quarter of 2019, according to consulting firm IDC. While Oppo, Vivo, and Xiaomi have full access to Google services in international markets, Huawei lost access to new devices last year after the U.S. banned U.S. vendors from selling goods and services for national security reasons.

According to Will Wong, an IDC analyst for smartphones, Chinese vendors are trying to gain a larger share of software and services as hardware sales decline.

"App store, preloading apps, advertising and games are areas that could generate new revenue," he said.

Huawei is also moving away from Google by developing its own Harmony operating system as an alternative.

The GDSA website contains the logo of Wanka Online, an Android platform for "ecosystems" listed in Hong Kong, along with a contact person for the General Secretariat of GDSA. Wanka declined to confirm his commitment.

The GDSA could attract some app developers by attracting more attention than the already crowded Play Store, and the new platform could offer better financial incentives, according to analysts.

"Huawei, Oppo, Vivo and Xiaomi make it easy for developers to increase their reach across multiple app stores to attract more developers and ultimately more apps," said Williams.

However, managing the alliance could be challenging, said Peng. "Implementation is difficult because it is difficult to say which company carries more weight and invests more in it. We have not seen the alliance model work well in the past."