LG Electronics is partnering with Google in launching Android Pay, a simple payment service associated with the Android camp. Despite its partnership with powerful Google, it still remains questionable whether LG can counterbalance the status quo of the simple payment service market, which is currently dominated by Samsung and Apple.
According to an industry watcher on Aug. 6, LG is going to roll out the next Google Nexus phone in Oct.
The Nexus phone is a trial product featuring the latest version of Android OS. Due to their image as prototype products, the Nexus phones are sometimes called reference phones. Nevertheless, due to the large volume of sales they generate, manufacturers teaming up with Google spend as much time and effort in producing them as in producing normal smartphones.
Once chosen as a manufacturer for the Google Nexus phone, that manufacturer has the advantage of starting to develop software associated with the latest version of Android earlier than other competitors.
In fact, in the past, manufacturers like Motorola, HTC, and Samsung teamed up with Google to manufacture 6 series' of Nexus phones.
But this time the Nexus will be loaded with Android Pay.
The industry watcher said, “The question of whether Android Pay would succeed in the simple payment service market would depend on its ability to dominate the advanced countries’ markets in Europe and North America... this is in part why Google chose LG, given the latter’s success in these markets.”
Apart from its partnership with LG, Google has reportedly teamed up with Chinese manufacturer Huawei to manufacture the next Nexus phone.
However, Huawei's market competitiveness is known to be limited to the local Chinese market. Given the imperative of the Android Camp to dominate advanced economies, for the time being, LG is expected to lead.
Its partnership with Huawei appears more as a long-term strategy to build the base for future competition in the world’s largest market.
According to Industry watcher, LG would produce 5 inch Nexus and Huawei 5.7 inch Nexus phones, respectively.
Compared to Apple and Samsung, Google is a late starter in simple payment services. Nevertheless, Google is determined to expand its market share via its market power marked by 60 percent domination in the mobile OS market.
However, as in Apple Pay’s case, Android Pay is only compatible with Near Field Communication (NFC), short-range wireless communication, whereas Samsung Pay is compatible with both NFC and Magnetic Secure Transmission (MST). Therefore, as far as versatility is concerned, Samsung Pay is expected to be more competitive than Android Pay.