Subjective and objective: Is the Google module phone suspended or terminated?

[[145681]]

With the recent establishment of Google Alphabet and the reorganization of its business, the testing of Project Ara, a modular smartphone project that was highly praised by Google and the industry, has also been suspended. Although Google officially claimed that the so-called suspension meant that the testing of Project Ara modular smartphones originally planned to be conducted in Puerto Rico would no longer be carried out, not that the project was cancelled, but that the testing location was no longer in Puerto Rico, we believe that this may be a prelude to the final termination of the project. What is the reason?

From the subjective intention of Google to launch Project Ara module phones, it is hoped that through this project, it will accelerate the growth of smartphones, or more precisely, the growth of its own Android ecosystem in the mobile market. This is also the main reason why Google chose Puerto Rico, where the smartphone penetration rate is only half, as the test site for Project Ara module phones and why it was positioned at a low price. Unfortunately, the positioning of the smartphone penetration rate is low, and the corresponding market and user level are also low, but the customized approach of Project Ara module smartphones, which has high requirements for the market and user level, is itself very contradictory. In addition, even if the Project Ara module smartphone may be aimed at heavy smartphone users (so-called enthusiasts) as the industry says, then from the perspective of the growth of Android system users, heavy users will choose Project Ara, and accordingly they will give up other Android phones. Therefore, from the perspective of increasing the number of users in the Android ecosystem, Project Ara is not very meaningful, and this seems to deviate from the original intention of launching Project Ara module phones.

What is even more puzzling to us is that if Project Ara modular phones were originally intended to promote the growth of smartphones in emerging markets with low smartphone penetration and rapid growth through low prices (modularization reduces costs), then the later release of Android One, which is also aimed at the low-priced smartphone market, has undoubtedly become its biggest rival, especially when Android One has a bad start and is now returning to the market at a price of $50. Where is the market space for Project Ara modular phones, which were previously estimated to be priced below $100? Of course, we have not yet taken into account the difficulty of users in these markets in making customized choices.

At this point, some people may say that Project Ara module phones are positioned in the mid-to-high-end, or set a benchmark for smartphones in the industry like Google's Nexus phones. In fact, the two perceptions in the industry, such as the positioning in the low-end, expose the inaccurate positioning of Project Ara module smartphones. Even if it is positioned in the mid-to-high-end, such as Google's Nexus, the industry knows that Nexus is generally commissioned to a manufacturer in the Android camp to produce, but the shipment volume is negligible, and at best it is just a limited market promotion for the relevant manufacturers. This also leads to many disadvantages of Project Ara module phones from an objective perspective.

The first is the issue of support from partners (component manufacturers), which undoubtedly involves the factor of cost, but cost is closely related to the shipment volume of different modules required. Unfortunately, the shipment volume of customized modules (components) required for cost is difficult for manufacturers, including Google itself, to estimate. The key is that it is difficult for component manufacturers to determine their own break-even point in this model. This determines that the participation and support of component manufacturers will not be very high, at least compared with the current branded smartphone manufacturers. After all, the quantity of each module required for the smartphones of these manufacturers is fixed, and whether the final machine sells well or makes a profit or loss has nothing to do with the component manufacturers. That is, by cooperating with the whole machine manufacturer, the interests of the component manufacturer are guaranteed, and the risk is much smaller than cooperating with Google Project Ara.

Similarly, for device manufacturers, due to the fierce competition in the current smartphone market, most manufacturers ultimately compete on cost, and according to their own product planning (supported by a certain shipment volume), they can naturally get the most favorable prices from accessory manufacturers, which is then reflected in the price competition in the market and their own profitability. In comparison, the Project Ara module phone model with no quantity guarantee (the demand for each component will vary greatly) is not conducive to manufacturers' participation in competition or is not suitable for the current competition mode of the smartphone industry.

In addition, although some users can find accessory modules that suit their needs, Google has determined the framework of the appearance design of Project Ara smartphones, which greatly reduces the choice of appearance (so-called appearance) of smartphones as consumer electronics products, resulting in the homogenization of the appearance of Project Ara modular phones. It should be noted that the appearance of smartphones also plays a very important role in users' choice decisions. Especially in today and the future when smartphone hardware is becoming increasingly homogenized, appearance design may be one of the main driving forces for users to purchase phones, which once again exposes the deviation of Project Ara modular phones from the market and user needs.

To sum up, we believe that from the birth of Project Ara modular mobile phones to the present, with the development and changes of the smartphone industry, its subjective and objective contradictions have not only not been resolved, but have become increasingly prominent. The suspension of the project test this time may be a prelude to the failure of many of Google's previous so-called innovative projects.