Google appears poised to open an app store in China

There are tens of millions of smartphones running Android in China, but very few use Google Play services, and almost none of those phones have access to Google’s app store. This has led to various Chinese platforms finding a foothold distributing apps and media on Google’s operating system.

It looks as if Google wants to change that. According to a report in The Information, Google intends to launch a version of its Google Play app store in China. There isn’t a window set for its launch yet. First it needs to set up a legal structure, as well as figure out a way to run the store for Chinese consumers who might not have Google accounts already.

In addition, Google publicly announced this week that it’s changed the policies surrounding app developers in China earlier this week. Chinese developers can now make money from paid apps downloaded in 130 countries around the world, but not China. Obviously, this is not a permanent situation: Eventually, Chinese developers will want to develop for their own country and get paid for it.

Aside from the potential revenue from millions of Chinese people, there are other reasons why Google would want to have its own app store. There’s a lot of malware going around China, mostly from sketchy apps downl0aded third-party app stores, which can slow down phones and lead to lost data, and often that reflects poorly on Google, even though Chinese devices are often based on a [company]Google[/company]-free open source version of Android.

Some of the subtext here is Google’s longstanding row with Chinese internet regulators. Google is the third largest search engine in China, and many of its results are scrubbed at the request of the Communist Party. In 2010, Google pulled its servers from the country, but the spat has continued — earlier this year, for instance, Google sites were widely unavailable in China for a period of two weeks.

That means that in order to launch Google Play in China, Google will need to make significant changes, because various core Google Play services — like Gmail or Maps — are blocked or could be blocked at any moment. Google also doesn’t have any servers in the country, so downloads could be painstakingly slow. But moving servers back into China means that Google would once again needs to pay close attention to sometimes arbitrary Chinese regulations.

But Google’s not the only American company to face issues in the Middle Kingdom. [company]Apple[/company] apparently had trouble getting routine certification for its iPhone 6 earlier this year, which could have meant billions in lost revenue. [company]Qualcomm[/company], which produces most of the chips that power premium Android phones, is facing a huge antitrust fine in China and still struggles to collect royalties from its intellectual property. Those companies, and Google too, will still push forward in China simply because the market is so huge.