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Google emerging-markets phone gets hung up in India as retailers cry foul

Some of India's biggest brick-and-mortar retail chains are refusing to sell Android One devices, due to Google's handling of online sales, as well as low profit margins, says a report.

Google has partnered with handset makers Micromax, Karbonn and Spice to bring phones that cost about $100 to India. Getty

Google and its low-cost Android One phones for emerging markets are in hot water over the handling of the sale of the devices online, says a new report.

Some of the largest brick-and-mortar retail chains in India, which combined have more than 1,800 stores nationwide, have decided against stocking Android One smartphones, The Economic Times of India reported Thursday, citing unnamed senior industry executives. The companies were initially shut out of the launch of the devices, which were at first available only online.

Android One is designed for developing markets around the world. Google has partnered with several device makers, who have built products that are budget-friendly -- costing about $100 -- but still run on Google's Android operating system for mobile gadgets. The idea is for Android One to become the first smartphone for the billions of people around the globe who have yet to get a mobile device.

Google partnered with three Android One manufacturers in India -- Micromax, Karbonn and Spice -- that launched devices in mid-September. The companies at that time decided to sell the products only online, at Amazon, Flipkart and Snapdeal. But after sales remained sluggish, they offered the devices to brick-and-mortar retailers.

There are several issues surrounding the Android One devices, according to The Economic Times' sources, but chief among them is that the brick-and-mortar retailers were cut out of the equation initially. In addition, the devices offer lower margins than the retailers would like, and since demand has been low, according to the report, there's less of an impetus for the retailers to play ball.

Google did not immediately respond to a request for comment.