Android Phone Manufacturers Will Soon Have To Pay To Offer Google Play Store

The Verge:

EU countries are divided into three tiers, with the highest fees coming in the UK, Sweden, Germany, Norway, and the Netherlands. In those countries, a device with a pixel density higher than 500 ppi would have to pay a $40 fee to license Google’s suite of apps, according to pricing documents. 400 to 500ppi devices would pay a $20 fee, while devices under 400 ppi would pay only $10. In some countries, for lower-end phones, the fee can be as little as $2.50 per device.

The EU has ruled that Google can no longer require manufacturers to pre-install Google Chrome and Google search in order to feature the official Android app store, the Google Play Store. It views the entanglement as anticompetitive.

Naturally, Google is appealing the decision but it must comply in the meantime. The new European license will require manufacturers to pay a per-device free for the rights to pre-install the Play Store and other apps. If the hardware companies choose to install Google search and Chrome, a revenue sharing deal will let them recoup some of the costs of the Google Mobile Services license.

The fees are not yet confirmed, but The Verge has supposedly seen the draft agreement, and the costs are set to be significant. The Verge quotes a $40 charge for devices with >500 PPI screens. That is a lot. The Galaxy S9+ screen has a pixel density of 529 PPI. Its build-of-materials is estimated to total $375; a $40 Android license fee is a 10% cost increase and would make Android one of the most expensive ‘components’ in that phone.

There are many potential ramifications of this change. I’m sure Amazon is overjoyed with a renewed chance to expand the reach of the Amazon Appstore. Microsoft could make an Android phone that has the Google Play Store but ships with Edge and Bing. It’ll be interesting to see how many companies suddenly become more thoughtful about what screens their phones use, picking screen resolutions that just go below the $40 500 PPI threshold. Saving $20 per unit is a strong incentive indeed. It’s not like a consumer is going to complain about a mere 400 PPI display. 500+ pixel densities are basically superfluous.

A particularly good example is the aforementioned Galaxy S9+. The physical screen panel is 6.2-inches with a 2960x1440 resolution, yielding a 539 PPI. Yet, Samsung’s software defaults to a much lower screen resolution: 2220x1080. In this mode, the effective PPI is ‘only’ 396. As most users never change defaults, it’s pretty obvious that most of the S9+ models Samsung have sold are not breaching 400 PPI. Under the leaked terms, Samsung would save $30 in licensing costs on every device, if they made the hardware resolution match the default software configuration.