China Unicom has become the first major Chinese company to declare its loyalty over the Google affair, announcing that it would drop Google as the search engine of its upcoming Android phones.
The phones, developed by Motorola and Samsung, were put on hold by Google in January after it announced it was thinking about leaving the mainland.
According to the Financial Times, analysts think Unicom will be affected by the decision. "Their distribution of the iPhone is not going very well and therefore Android was an important part of their strategy," said Charice Wang, an analyst at Ovum, to the newspaper.
I’m not so sure. Disabling Google as the phone’s in-built search engine is unlikely to dampen the appetite of consumers for the phones. However, Android is Google’s baby and it will be interesting to see how its future pans out in China now that Google has evidently upset the government.
Where the analysts are correct, however, is that the iPhone is not working wonders for Unicom. I’ve written extensively before about how Unicom was bungling its golden iPhone deal, but now the figures are finally in. Unicom’s full-year profits, announced yesterday, fell by 73% to 9.56 billion yuan ($1.4 billion), compared to 35.4 billion yuan a year earlier.
Unicom did benefit in 2008 from the sale of part of its business to China Telecom, but nevertheless, these figures make for grim reading. Unicom has the fewest 3G subscribers out of the big three networks (China Telecom is leading the way), and its monthly 3G growth has been slowing down, to just 470,000 in February, compared to 853,000 in January and 920,000 in December.
In short, the iPhone has not helped Unicom a jot. Which is why the decision to quibble with Google over the Android phones is a bold one.