Google plans Android expansion in India, China

Google Inc. plans to push its Android mobile software in India and China, and is exploring ways for developers to make more money from applications, stepping up competition with Apple and Nokia.

To attract programmers to its Android operating system, Google may offer tools that help them sell subscriptions, virtual goods and other items from within applications on mobile phones, Andy Rubin, vice president of engineering at Google, said in an interview.

The company also intends to put its Android operating system on lower-priced phones made by Huawei Technologies Co. and LG Electronics Inc. in parts of Asia and Europe, where it's taking on Nokia, the mobile market leader.

"The down-market opportunity is about to happen," Rubin said. "It's actually quite a revolution."

Android is part of Google's strategy to get more of its software on mobile devices, opening up new opportunities to sell advertising - its main source of revenue. The total mobile-ad market will grow to $13.5 billion in 2013 from less than $1 billion last year, according to research firm Gartner Inc. in Stamford, Conn.

Google, based in Mountain View, lags behind Apple in mobile apps, which are a growing platform for ads and help attract consumers to devices. Android users have about 65,000 apps available, less than a third of the more than 200,000 Apple programs.

Google is taking steps to rev up Android's growth. Increased presence in new markets such as South Korea helped drive up the number of users who activated Android devices to 160,000 a day in June, up from 100,000 in May, the company said. Sixty-nine percent of Android-based phones sold in the first quarter were in the U.S. market.

"We are definitely in the hockey stick," said Rubin, referring to Android's growth pattern. Gartner predicts that Android will leapfrog Apple's iOS by 2012 to become the world's second-most-popular mobile operating system behind Nokia-supported Symbian.

Google also is increasing incentives for app developers. It's exploring ways for programmers to make more money from their software, such as by making it easier to accept payments within the apps or sell subscriptions, Rubin said.

That provides a way for consumers to purchase new game levels, virtual weapons and monthly subscriptions to digital magazines. Apple added similar features to the iPhone in 2009.

Most Android developers still make money from ads being placed within their apps or from one-time fees. That makes it harder for them to earn as much as their Apple counterparts. Of the $4.4 billion consumers will spend on app downloads this year, Apple's App Store will receive at least 77 percent of the revenue, according to Futuresource Consulting in Dunstable, England. Android Market will collect 9 percent.

Natalie Harrison, a spokeswoman for Apple, based in Cupertino, didn't return a call seeking comment.

While businesses like eBay Inc.'s PayPal already offer in-app payments tools for Android developers, dealing with multiple companies increases the complexity, Rubin said. Since starting its in-app payments tool on May 19, PayPal has had more than 1,000 developers download it, said Osama Bedier, a vice president at PayPal. Most of the developers came from China.

Google is also helping handset makers like Huawei in China and LG in South Korea offer cheaper Android-based smart phones, Rubin said. Huawei, the biggest maker of wireless equipment for carriers in China, unveiled four Android phones and an Android-based tablet in February.

Smaller Chinese manufacturers, which make up about 10 percent of the global phone supply, are also adopting Android, seeking to gain share with lower-priced devices.

This article appeared on page D - 6 of the San Francisco Chronicle