China sounds alarm over Google’s Android

Google wields too much power in China’s booming smartphone market through its Android operating system and is deliberately hindering the ability of Chinese companies to develop their own platforms, the Chinese government has said.

Android, used in Samsung and HTC handsets, is by far the most popular operating system in China with 90 per cent of the market, far outstripping Apple’s 4.2 per cent share, according to market research firm IDC.

While Chinese companies including Huawei, ZTE and Baidu are all developing their own systems – most of them closely derived from Android — take-up by handset makers has so far been almost non-existent.

“Our country’s mobile operating system research and development is too dependent on Android,” researchers from the Ministry of Industry and Information Technology wrote in a white paper. “While the Android system is open source, the core technology and technology roadmap is strictly controlled by Google.”

Beijing appears to have been riled by the familiar story of China as the world’s factory floor, manufacturing the hardware for the majority of the world’s handsets but failing to capitalise on the lucrative intellectual property behind the technology.

Analysts said it was possible that the Chinese government could bring in regulations against Android to limit its share of the market.

However, it was more likely that it would seek to introduce incentives or subsidies to promote Chinese developers’ systems, as it ploughs money into home-grown R&D, they said.

Mark Natkin, the managing director of Marbridge Consulting in Beijing, said: “My guess is that you’ll see incentives or support [for domestic developers] rather than regulations to bar Android from the market. It is too heavily entrenched. It is sending out a message to domestic companies that this is a priority.”

Under World Trade Organisation rules, any attempt to restrict Android would require China to cite exceptional reasons such as it posing a security threat.

The report also accused Google of discriminating against Chinese developers by failing to share its codes.

Michael Clendenin, founder of RedTech Advisors in Shanghai, said: “The Chinese mobile phone makers do have alternatives – they can use local operating systems – but no one is using them. It is one thing that saying that Android has an overwhelming advantage, it’s another to take meaningful steps to come up with a competitive local version.”

Mr Clendenin added: “Unless there is some sort of diktat to say Android cannot be used, it will be virtually impossible for a local operating system to grab back share in the next three to five years.”

Relations between Google and the Chinese government have been strained since 2010 when the search giant announced it was partially pulling out of China and moving servers to Hong Kong because of Beijing’s censorship regime.

A previous attempt by the Chinese government to force international wireless equipment makers to share technology with their local counterparts was shelved after an outcry.