Google Apps License Could Cost European Phone Makers $40 Per Device

The European Commission handed down a ruling earlier this year that fined Google a record $5 billion for anticompetitive practices in Android licensing. In addition to the fine, the Commission is forcing Google to unbundle some of its apps from Android, but the company says that’s going to mean more fees for phone makers in Europe. Now we’re finding out how steep those fees could be. A leaked document suggests that Google could charge OEMs as much as $40 per phone for a Google apps license.

The Commission’s requirement that Google unbundle apps is bound to make Android licensing more complex. As it currently stands, Google has announced that it will no longer include Chrome and Google Search in the Google apps bundle for phones in the EU. That is supposed to allow device makers to bundle other options and increase competition. However, Google makes a lot of money from Chrome and Search, so it will charge an up-front license fee for the devices.

According to a leaked Google document, phones will be split into three different tiers, with the prices varying by country. UK, Sweden, Germany, Norway, and the Netherlands will have the highest license fees. There, a phone with a pixel density of 500 ppi (pixels per inch) or higher will cost $40 each to license Google’s apps. Between 400 and 500 ppi, OEMs will pay $20 per phone. Under 400 ppi, and the cost is $10 each. In some countries with smaller economies, the fee could be as low as $2.50 per Android license.

The document doesn’t go into detail about why pixel density is used to split up phones, but it’s probably just a simple way to determine how much a phone costs without factoring in local pricing. A high-end phone like the Galaxy Note 9 has a higher pixel density (516 ppi) than a budget offering like the Galaxy J8 (274 ppi).

Companies can still enter into separate licensing agreements for Chrome and Google Search, and most of them probably will. Google won’t pay a share of search revenue from devices that don’t ship with the apps, even if the owner installs them from the Play Store. By agreeing to bundle Chrome and Search, they might be able to offset the license fee completely. The only way to avoid all this is to skip licensing Google apps entirely, and that’s not a recipe for success.

The revamped licensing, which Google is not confirming at this time, will go into effect in February 2019. It will stop bundling Chrome and Search at the end of this month.

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