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Summary:

Android is taking over in emerging markets such as South-East Asia, but data there remains a pricey proposition. Finnish firm Blaast is teaming up with local operators to fix that situation.

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As recent figures have shown, 72 percent of all mobile devices being sold – not just smartphones – are now Android-based. That points to an invasion by the Google OS of emerging markets, but there’s a problem: data is still way too expensive for people in such areas.

That’s why Blaast, who we covered earlier this year, has just launched on Android. The Finnish firm’s platform provides versions of popular apps that run partly in the cloud; mixed with clever compression techniques, this means lower data use. Think Snappli or Onavo‘s data shrinkage, but baked into the apps themselves for deployment in partnership with carriers.

Before now, Blaast has only been rolled out by operators in Indonesia, Malaysia and Bangladesh on their low-end Java featurephones – a similar approach to that taken by the Eric Schmidt-funded biNu, but offering an app store rather than a fixed suite of apps. And even before this shift to Android, it’s already been a big success.

“We are bundled on over 50 million SIM cards,” CEO Joonas Hjelt told me at the Slush conference in Helsinki on Tuesday. “We have over 4,000 developers, and over one million chat messages per week in just one app. That’s how we’re doing with featurephones.”

Now, those are very basic, lightweight apps. Stepping up to Android means more complexity, and Hjelt claims Blaast pretty much halves the amount of data those apps use, on average.

So how big is that data problem, really?

“In emerging markets, it’s as expensive as having an AT&T subscription and roaming in Indonesia,” Hjelt said. “That’s what it’s like for the local people. [In terms of spending power] it’s six to ten times more expensive than in the U.S.”

Here’s the deal at launch. Indonesian operator XL is bundling the Blaast store alongside the Play Store on its Sony Xperia J. The carrier is rolling out a $5-per-month tariff for the use of Blaast apps – that’s around half of the previous cheapest option in Indonesia. Alternatively, customers can opt for even cheaper deals that give them a la carte access to specific apps, such as Facebook or WhatsApp.

“By promoting this as a channel, the operator benefits – they can lower their entry price and get more data subscribers,” Hjelt said.

Bye-bye browser?

There may be an interesting side-effect of this whole approach.

Consider this. For people in emerging markets, the handset is the personal computer. Many have never had a desktop and, chances are, they never will.

But, with data being expensive and platforms such as Blaast representing the cheapest way to get online, these people may find themselves limited to a subset of apps. (It should be noted that XL’s launch deal for Blaast also includes data for general use, but that may just be a promotional offer.)

Where data is more reasonably-priced, the browser is one of the most important elements of any smartphone or tablet. Take it out of the picture, and you excise the open web; we’re talking about a curated, closed experience. Better than nothing, for sure, but not open.

At some point, the cost of data will level out in such regions (although Hjelt maintains that “making things faster and more affordable will never go out of fashion”). Until that happens, we may be looking at a serious geo-economic split in the way people use and experience the internet.

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  1. Michael Elling Friday, November 23, 2012

    This is a great example of the linkage between layer 7 and layer 1. Markets always come up with solutions to get around (arbitrage) vertically integrated and overpriced monopolies.

  2. Data is already inexpensive, at least here in India (300MB of 2G for less than a dollar). Even scaled up for earning parity, not sure the cost factor is cruicial .. even at a 2x compression. And how intrusive it is this for the application layer? BTW I don’t think you can get 2x for the biggest cuplrit, video, unless you spend a lot of power and processor cycles.

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