By the end of this year, China will have as many Android users as the US has people

And guess who’s not making money on those Android phones?
And guess who’s not making money on those Android phones?
Image: AP/Alexander F. Yuan
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More than 300 million Chinese will have Android smartphones by the end of this year, according to China-focused Android app store Wandoujia. That’s a growth rate of 34% since 2012, when the country had 224 million Android users.

While it’s hard to imagine that growth can continue at this pace, picture this: There are around 700 million Chinese with non-Android mobile phones. And 86% of new smartphones sold in China run on Android. (While 73% of new phones sold in China are smartphones.)

Perhaps the most interesting thing about all this growth is what’s conspicuously absent from it: Google. While Android succeeds in China, it’s largely versions of Android uncoupled from Google’s “official” version—all of which is possible because Android is open-source, which means anyone can copy it for free.

In western markets, Google has some leverage over handset makers like Samsung because Google makes access to its Google Play app store contingent on phone manufacturers shipping their devices with approved versions of Android. But handset makers in China have no such compunction: The majority of the country’s apps are sold through custom, China-only app stores like Wandoujia.

And Google’s other means of making money—advertising—isn’t doing well in China, either. Google’s search engine has less than 5% market share in China, and that is continuing to drop.

In other words, Google is now sponsoring the mobile software R&D for what will soon be 300 million Android-based Chinese phones—and, in China at least, getting virtually zero return on its investment.