Google Heats Up The Competition In The Mobile Operating System Market

Nov. 6.13 | About: Alphabet Inc. (GOOG)

On October 31, 2013, Google (NASDAQ:GOOG) released the latest version of Android, the long-awaited KitKat; meant for fun, communication and work. The new operating system is beautiful & immersive as it has a more polished design, improved performance and features like new immersive mode, which automatically hides everything except what the user really want to see. It also has the "grab & go" features that help the user to get the things done while on the move and also allow the user to use Google's cloud services, like Google Drive and Cloud print, in a friendly way.

With the launch of this new version of Android, Google aims not only to improve the performance, but also to further expand its reach in the mobile operating system market. KitKat is made for the next billion smartphone users, and the most of these users belong to the lower-end of the smartphone market; who will own the entry level, low priced smart phones.

The entry level smartphones are typically low on the memory (RAM). RAM is one of the most expensive parts of a phone, and the manufacturers do not provide the high amount of RAM on the low-priced smartphones. The key feature of the new KitKat is that it is meant for the universal use.

Key feature:

Android has been the basic mobile operating system for more than a billion phones and tablets around the world. However, not all the phones can use the company's new services and apps. The reason behind this is that the huge number of users are still stuck with the older version of Android. Not willingly, but due to the memory constraints, as some of the previous updates of Android need the higher memory that typically is not available in the low-priced smartphones.

KitKat is big on the features and light on the memory (RAM), as the company wants to reach the next billion users. The company has built this platform while keeping the larger segment of the users in the mind.

Latest Android can comfortably run on the 512 MB of RAM devices, as the company curtailed down the memory requirements by removing the unnecessary background services and reducing the memory consumption of some highly used features.

As said by Sundar Pichai, Google Senior Vice President of Android, Chrome and Apps:

"The new "KitKat" version of Android will be able to run on inexpensive, low-end smartphones as well as the most advanced devices"

Other features:

KitKat came out with the many new and improved features, including an all-new Phone app, improved Hangout app, better Google now integration, better cloud access, translucent menu bar, etc.

Beautiful & Immersive:

The newly redesigned user interface includes a translucent menu bar at the bottom of the screen and full-screen wallpapers. Voice search is now available on the home screen. Just say, "Ok Google" and the things start happening without even touching the screen. So, just say, "Ok Google" to launch voice search, send a text, get directions or even play a song.

More fun:

KitKat enables its users to see the beautiful full-screen album or movie art and let them play or pause a video or audio even when the device is locked. Moreover, the new immersive mode, which automatically hides everything except what the user really want to see will make each device a better media player or e-book reader. Google Keyboard is now enhanced with Emoji, the colorful Japanese characters (see the picture below).

Smart, Simple, personalized and intelligent:

The new Phone app automatically prioritizes the user contacts and checks an unlisted number with local listings on Google Maps. The new Hangouts app allows the users to interact with the friends in a much better way as now they can share location, send animated GIFs, aggregate all SMS and MMS messages together in the same app along with the other conversations and video calls.

Work and cloud:

The new Android is meant for the better integration with the cloud services. Its users can print to any printer connected to Google Cloud Print, to HP ePrint printers, and to the other printers that have the apps in Google Play Store. User can also access, open and save files on Google Drive from the apps like Quickoffice (see the picture below), which is redesigned to create and edit documents, spreadsheets and presentations.

Conclusion:

From Cupcake to KitKat (see the picture below) Android has traveled a long distance since its first launch in 2009. Click to enlarge

Though Android supports nearly a billion devices in the world, Android itself is not a single unique platform. It is available and in use in the various versions, which varies widely from each other. Many of the older versions, which are still very much in the use (see the graph below) do not support many of the key Google's apps like Google Now, which hold the enormous potential for the future.

Google Now is an intelligent personal assistant of Google. It is integrated with Google Search mobile application for Android and iOS operating systems. Google Now displays information-cards that gives the personalized information regarding flight, hotel reservations, restaurant reservation, movie concerts, stocks, etc. This information is based on the information from the user's Gmail account, location and search history.

The graph below provides the data about the relative number of devices running a particular version of the Android platform.

Click to enlarge

Kitkat is Google's solution for the above-mentioned fragmentation problem of Android platform. This will enable almost all low-priced devices to run on the latest Android.

As said by Sundar Pichai, Google Senior Vice President of Android, Chrome and Apps:

"Now you have one version of the operating system which will run across all versions of Android smartphones," "Our goal was to build one version of the operating system that runs across all Android smartphones in 2014."

Though, for the in-use Android devices, a lot will depend on the manufactures' and if they want to provide the latest Android updates for their older in-use devices. The possibility is bleak, and this is why the company called it an "Android for next 1 billion users" not for the present billion.

KitKat will not only allow the more users to access Google's latest services, but also will make Android a more preferred platform for the developers as this will give their new Android apps much higher exposure as compared to the earlier fragmented versions. So, now Android will become the first choice for many more third party app developers. As such Android platform hopefully will see the lots of more apps getting developed.

The mobile operating system plays a big role when a customer chooses its smartphone. That is why all the top mobile operating system developers such as Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google always try to stay ahead of each other by the regular updates and innovation.

Google is the first company that understands that if it wants to get more revenue/profit out of the mobile apps/services, then it must have to expand the reach of its mobile operating system and apps to the low-end of the smartphone market. The growth in the low-end segment of the smartphone market is the prime reason behind the proliferation of the market.

With the launch of KitKat, Google not only heats up the competition in the mobile operating system market, but also will reduce the performance difference between the high-end and low-end smartphones to some extent. This may hurt the sales of the high-end smartphones.

The customers can look forward to slew of launches by the smartphone manufactures in the low to mid segment of the smartphone market, with a promise to deliver a better performance and also improved accessibility of the new apps. All in all, Google once again introduced something that can make its share in the mobile operating system market even bigger.

Disclaimer: Investments in stock markets carry significant risk, stock prices can rise or fall without any understandable or fundamental reasons. Enter only if one has the appetite to take risk and heart to withstand the volatile nature of the stock markets.

This article reflects the personal views of the author about the company and one must consult its financial adviser before making any decision.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.