Android could cost operators an avoidable $2 billion a year

Android is Android, right?

Well, no," says Tim Deluca-Smith, VP of marketing at WDS and the author of a new report on how the Android platform — while democratizing the smartphone experience for carriers and consumers alike — is fragmenting, costing carriers worldwide billions of dollars each year.

Over the course of a year, WDS tracked consumers' interactions with the Android ecosystem and analyzed 600,000 technical support calls to operators. The catalyst for this, Deluca-Smith said over a phone call, was partly WDS' engagement with a fixed-cost, unlimited-service operator in Western markets that had built its business primarily on feature phones but, with lower-cost Android smartphones becoming available from ZTE, Huawei and the like, jumped on the opportunity to invest in lower-cost Android units.

All versions of Android and all handsets, however, offer different experiences. The carrier soon found itself fielding a disproportionate number of customer support calls, said Deluca-Smith, which quickly cut into its bottom line.

"There's also a big cost associated with device returns," he added, which involve the time of staff in the warehouse, financing and customer support. With average smartphone returns estimated to be between 5 and 10%, "Android device returns could be costing operators up to $2 billion a year."

Another carrier WDS looked at invested considerably in advertising a particular Android app, which it turned out the Android phone it was offering couldn't support.

The report additionally gives the example of game developer Rovio Mobile, which withdrew its Angry Birds game from the Android Market after receiving complaints that the game was running poorly on a number of devices. It turned out that some "older and less-well specified devices were unable to deliver a quality gaming experience," wrote Deluca-Smith. Rovio had to recode the game for the lowest-common-denominator of Android and re-release it.

Netflix had similar issues, eventually having to work with each Android manufacturer to add "content protection" to their various devices.
To make Android available to as many manufacturers and budgets as possible, the report explains:

... minimum processor / graphics processor speeds (one of the largest single component costs in an Android build) are low; certainly lower than the 1Ghz processor speed mandated by Microsoft for all Windows Phone 7 builds. This is the problem that Rovio Mobile ran into ... It’s also a problem that many smartphone consumers experience, many of who subsequently add cost to their mobile operator by contacting customer care looking for a resolution, or worse, looking for a replacement.

Compounding the problem can be the amount of time a device sits in the dealer channel; what seems a new device could actually have a 12-month-old processor and an old OS version, leading to disappointed consumers who can't have all the same experiences as their other Android-owning friends.

What to do? Deluca-Smith offered carriers a few points of advice.

First, they can improve the device testing they run through, making sure the build is appropriate to the value-added services they're offering.

Second, they should populate retail and support environments with appropriate support materials.

"You have people who've never been exposed to smartphones, receiving little coaching, and this is where you find issues of returns. They think there's something wrong with it — the battery dies quickly, for example, but they've got [everything] turned on and draining it, though they have no idea."

Users need to have a Gmail account to set up an Android phone. "How easy would it be for the sales rep to ask if they have a Gmail account, and if not very quickly help them set one up? It's sometimes very simple things like that that make the difference."

Because it has a little green Android on it, doesn't mean it's all the same, Deluca-Smith repeated. "You have to manage user expectations."

Which is not to say that Android hasn't been great for the industry.

"The challenges that have arisen," he noted, as he does in the report, "are addressable and in no way outweigh the benefits derived from Android’s accessibility and openness."