Asia is Android land. The billions coming online do so predominately on mobile devices running Google’s operating system. This is great news for Google.
Google Axes Prices on Play Store Across Asia to Juice Spending
An alternative to Facebook’s emerging market strategy.
Agung Parameswara / Getty
The bad news for Google is that these Android users don’t have much spending power. So while they may buy Android phones, they funnel little money directly to Google, putting it further beyond Apple in draining cash from mobile services.
Google’s solution: Cut prices. On Tuesday, the company announced it was drastically reducing the minimum threshold for paid apps, games and in-app purchases on its Play Store in five countries in southeast Asia. It comes after a trial period in India, the largest market outside of China (where Google remains, for now, operationally absent).
Facebook, the other Internet giant, has taken a different tack to expand its business in ballooning Asia: Subsidizing the cost of data. But it has run into problems with that approach. After the backlash Facebook faced, Google has shuttled the several data-subsidization efforts it had under way and is grappling for other paths.
Looks like chopping prices is one. It’s unclear if Google is taking the hit on the pay cut, or passing the buck to developers.
Update: Google does not cover the price difference but, Google being Google, it’s likely that it saw data from the India trial that showed the price cut would stimulate enough new demand to make it worthwhile for app creators.
This article originally appeared on Recode.net.
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