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As Samsung's market share grows, so too do tensions with Google

post #1 of 28
Thread Starter 
Google executives are concerned that Samsung's influence on Google's Android operating system is too strong, and the search giant is turning to its other Android partners in hopes of getting back some leverage on the South Korean conglomerate.

GS3


The Wall Street Journal on Tuesday carried word that Google is concerned about Samsung's preeminence in the Android smartphone segment. Samsung, chief rival to Apple, accounts for about 40 percent of Android device sales.

Samsung shipped 215.8 million smartphones last year, most running Android. That figure accounted for 39.6 percent of the global smartphone market. In addition to its 40.2 percent share of Android-based smartphones, Samsung also manufactures about 27.9 percent of Android tablets on the market, up from 15.6 percent in 2011.

In terms of who is making money off smartphones, the picture is even more grim, with Apple and Samsung estimated to grab 106 percent of smartphone profits when taking into account losses by other manufacturers' mobile divisions.

Google executives, The Journal holds, worry that Samsung could use its position as the leading Android manufacturer to renegotiate its arrangement and eat into Google's mobile-ad business. With that in mind, the search giant is said to have met with other manufacturers at Mobile World Congress in Barcelona in the hopes that their devices could challenge Samsung.

Currently, Samsung receives more than 10 percent of the revenue Google generates from mobile search. The fear, according to reports, is that Samsung could demand a higher share of the online advertising revenue Google gets from Android devices.

Possibly worse, the company could "fork" Android ? much in the same way that Amazon has for its Kindle Fire line of devices ? and cut Google out of the equation entirely. Alternately, Samsung could shift its devices to its own operating system, dubbed Tizen, which features a limited degree of interoperability with existing Android apps.

Google, though, is not without recourse. Should its relationship with Samsung take a turn for the worse, the search company could increase its efforts to improve the standing of Motorola, which it bought last year for $12.5 billion. Already, Google is said to be working on a "game changing X Phone" within Motorola. Such a device, should it live up to the hype, would have the triply beneficial effect of reestablishing Motorola, further combating Apple, and balancing Samsung in the Android sector.
post #2 of 28

Maybe they've created a monster. Karma is a bitch. 

A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #3 of 28

The only way this would work is if they fork it in such a way they could work a deal with Amazon for their App Store. Otherwise, why bother? As we all know, ecosystem is the key. If there's no developer support they're just as DOA as the Blackberry and Windows Phone reboots. Is a consumer going to buy a frankenphone with Bing Search, Amazon Apps, ?? for maps...they'd be really stupid to. I don't think that's the issue, the issue is money, ad money. Would love to see them try and crash and burn though.

I'm not a pessimist. I'm an optimist, with experience.
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I'm not a pessimist. I'm an optimist, with experience.
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post #4 of 28
Quote:
Originally Posted by Robin Huber View Post

Maybe they've created a monster. Karma is a bitch. 

I heard a rumor that the new Googorola phone is going to be called "The Re-Animator".
post #5 of 28
Things are getting more complex as Samsung is trying to distance itself from Google. Samsung just cannot stand watching Apple taking in huge profits even though Apple is way behind smartphone market share. News are coming out of Korea about Samsung installing their own version of iTunes on Galaxy S4 which will be revealed next month.(it might even be called 'GalTunes'...funny. Their new e-books store interface is 100% copy of iBooks by the way.)
It's obvious Samsung is trying to copy Apple's ecosystem model because they want to make extra money with contents and software. But I believe Samsung will fail miserably in their attempts to copy Apple(and Google)'s ecosystem because they just don't know how to do software.
Their new Tizen OS UI looks like cheap version of Firefox OS and I think Firefox and Ubuntu have better chance of eating into Android market share than Tizen.
post #6 of 28
Samsung and Google deserve what they have created....a dogsh*t business model!
post #7 of 28
I'm thinking Samsung is a good problem for Google to have. They have created a monster, for sure, by not forcing Samsung to license their OS (Google services/trademark must be licensed, but still that's pennies compared to say, what Microsoft requires).

Still, I'm guessing that with the ascendence of Android, Google is now "secure" as their search business isn't the only leg of their profits or future.

It will be interesting to see what transpires. I don't think Samsung is willful enough to sacrifice their "first amongst equals" situation with Google, and I don't think Google is daring enough to simply bump off their biggest partner in the Android space (not sure what Moto is set to do these days).

Perhaps this will become more of a WinTel relationship. Given the cultural differences, perhaps not.
post #8 of 28
Quote:
Originally Posted by thataveragejoe View Post

The only way this would work is if they fork it in such a way they could work a deal with Amazon for their App Store. Otherwise, why bother? As we all know, ecosystem is the key. If there's no developer support they're just as DOA as the Blackberry and Windows Phone reboots. Is a consumer going to buy a frankenphone with Bing Search, Amazon Apps, ?? for maps...they'd be really stupid to. I don't think that's the issue, the issue is money, ad money. Would love to see them try and crash and burn though.

Samsung is about three times as profitable as Google, and growing rapidly as smartphones grow. In another year or two it might make sense for Samsung to simply buy Google.
post #9 of 28
Quote:
Originally Posted by thataveragejoe View Post

The only way this would work is if they fork it in such a way they could work a deal with Amazon for their App Store. Otherwise, why bother? As we all know, ecosystem is the key. If there's no developer support they're just as DOA as the Blackberry and Windows Phone reboots. Is a consumer going to buy a frankenphone with Bing Search, Amazon Apps, ?? for maps...they'd be really stupid to. I don't think that's the issue, the issue is money, ad money. Would love to see them try and crash and burn though.

There are rumors that all this anti-Apple/pro-Samsung articles lately is a strategy. Look, we are seeing articles daily about how Samsung is the cool kid now, Samsung has the best this, etc. p

Personally, I don't even thing Samsung has the best android phone out there. Maybe not even second best. But they are selling.

Have you seen thr images of the S4? They clearly have a liberal copying attitude at Samsung. I would not be surprised at all if Tenzian 2.0 is a fork of Android.
post #10 of 28
Haha.

 

 


Tim Cook using Galaxy Tabs as frisbees

 

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Tim Cook using Galaxy Tabs as frisbees

 

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post #11 of 28

I hear Google has hardly done squat with Moto Mobility since they bought them.

post #12 of 28
Quote:
Originally Posted by r00fus View Post

I'm thinking Samsung is a good problem for Google to have. They have created a monster, for sure, by not forcing Samsung to license their OS (Google services/trademark must be licensed, but still that's pennies compared to say, what Microsoft requires)..

I doubt if that would have worked. The entire appeal of Android was the fact that it was free. If Google had charged a significant amount for it, it's likely that it would not have grown at the rate it did.
Quote:
Originally Posted by r00fus View Post

Still, I'm guessing that with the ascendence of Android, Google is now "secure" as their search business isn't the only leg of their profits or future.

Only one thing wrong with that - it's just not true.

Google makes something like 97% of its profits from search. Everything else is peanuts.

Android's entire purpose is to drive more business to Google Search.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #13 of 28

Another questionable piece from Wall Street Tabloid. Why would Samsung renegotiate for more profits? Both sides understand the strength of each other's hand, and I don't think the threat of Tizen is a strong hand. Google has the apps. Tizen doesn't. If Samsung really tried to sell Tizen phones instead of Android phones, I think they'd cede their market position pretty quickly. Google knows that.

 

Quote:
Originally Posted by pfisher View Post

I hear Google has hardly done squat with Moto Mobility since they bought them.

 

They used it to sue some competitors over FRAND patents. Didn't amount to much.

 

Quote:
Originally Posted by christopher126 View Post

Samsung and Google deserve what they have created....a dogsh*t business model!

 

Samsung's business model is to sell handsets, Google's is advertising (and increasingly, data mining their users). Not sure which is dogsh*t because they both seem to be making a profit.

 

Quote:
Originally Posted by Robin Huber View Post

Maybe they've created a monster. Karma is a bitch. 

 

I still don't think Samsung's hand is as powerful as Google's. One needs the other more than the other needs one.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #14 of 28
Quote:
Originally Posted by thataveragejoe View Post

The only way this would work . . .

It is fantastic that you have examined all other possibilities of solutions to this new Samsung venture and it is impressive that you are willing to give your vast business and technical expertise to the readers of this humble forum when you obviously could sell your incredible services to Samsung for hundreds of thousands of dollars.

post #15 of 28

Things can change very quickly in this space.  Google has the apps.  Tizen doesn't.  Today.  A short while ago Android didn't have the apps, either.  It can all change rapidly.

 

Look for Samsung to grow Tizen as Android's eventual replacement.  Samsung wants to be Apple.  You can't be Apple and create a unique valuable user experience if you've got exactly the same OS that every other manufacturer has.  Google will also want to kill off Samsung as soon as Google can grow its own branded phone business.  Google and Samsung are temporary partners on their brief honeymoon, in much the way that Apple and Google used to be honeymooning partners.

 

But it won't last because ultimately every single company wants to own it all.

post #16 of 28
If Samsung leaves Google high and dry because they won't give them enough of a services cut, I wouldn't be surprised if Amazon offered them a nice deal: more of a cut of ad, media, and app sales in exchange for being the default Apps for all of those things on Samsung Android handsets.

That would be a disaster for Google.
post #17 of 28

Android is "open", Samsung can do whatever they want with it, including exposing what a sham Android's "openness" is i.e. merely a marketing term.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #18 of 28
Hey Sergei, didn't you like this alliance with emperor palpatain?
post #19 of 28
Quote:
Originally Posted by hill60 View Post

Android is "open", Samsung can do whatever they want with it, including exposing what a sham Android's "openness" is i.e. merely a marketing term.

My exact thoughts. Just ask Acer what they think about this "openness".

Google is nothing but an advertising company that data mines, and simply buys companies. Hell even its search algorithms are not their own.

I am mystified why people think an advertising company can do software and hardware.

Its like i should take up Ballet, even though i have no clue.

post #20 of 28

Doesn't Google already have a phone - the Nexus 4?

post #21 of 28

Open always wins.  

 

/s

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post #22 of 28
Quote:
Originally Posted by Crowley View Post

Open always wins.  

/s

Sadly it often does at many levels. 'Open' is usually ripped off in the first place from Apple, then wins market share even if that means a zillion metal and or plastic pieces of crap running garbage. Apple haters buy anything they can at low prices running what ever 'Open' shit and ignore every flaw while the media searches out any tiny rumored flaw in an Apple product and magnifies it to a lunatic level. The media then obsess about market share being the 'be all and end all' and crown this the winning solution. Wall Street is impressed. History seems to repeat this over and over.
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Google Motto "You're not the customer. You're the product."
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
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post #23 of 28

Not sure what history you're reading, but I disagree, none of what you say there has happened with enough regularity to call it even close to a pattern.  Open does not always win, and it often doesn't.  "Open always wins" is just a catchphrase that has been adopted to cheerlead Android.  And now Google is seeing the flaws in its products openness unravel to their detriment in an entirely predictable manner.

 

Open sometimes wins, if it's better.

 

/ns

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post #24 of 28
Quote:
Originally Posted by hill60 View Post

Android is "open", Samsung can do whatever they want with it, including exposing what a sham Android's "openness" is i.e. merely a marketing term.

 

is it open as in free?... is so why is google vain?... "look at me, i gave away a free OS"

 

 Google should stop updating its OS apps for every phone that has ANDROID on it... 

make a stand... samsung pay google's programmers what were worth, or google moves on... a tough decision for Google, but the only way for google to show that samsung does not know how to write an OS.

 

so maybe GOogle should forget about the andriod OS, remove its name from the OS, and license the Blackberry OS 10..LOL. which should habe been called BBQ  (BlackBerry Qnx)... 

post #25 of 28
Google has a tiger by the tail with Samsung, which is the real competitor for Apple in CE; Google won't be until it commits to producing its own hardware and not just silly posturings like Pixel and Glass. Time for Google to man up with Moto offerings that can compete with Samsung's.

Samsung is milking Android for all the cash and spending those billions to boost its brand, not Google's brand. Can its own OS be far behind? Not far. How long before Samsung goes after Google's ad money with its own search? Not long.

Five years from now the mobile line up will be Apple, Samsung, Google/Moto, in that order. And that's on a good day. Without its own hardware, it's just as possible that Google ends up like Adobe, begging to be on everybody's devices and sending irritating notes out occasionally to let users know it's still in business.
post #26 of 28
Samsung without Android is crap
post #27 of 28
Originally Posted by hzqamy View Post
Samsung without Android is crap

 

Samsung with Android is crap with a bow made of poison oak tied around it.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #28 of 28
The Ubuntu phone concept is where it is going. I don't know if Ubuntu will be the one to pull it off, but the smartphone will become the computer, and will ,(wirelessly) dock with whatever and wherever the user is, whether home, business, car, school or retail. If you haven't watched the Ubuntu concept video, take a look. The only thing that is missing is that the screen of the smartphone will become the trackpad for the desktop computer as well.

Samsung, should they decide to adopt this, can have a good chunk of the computer market as well. I don't think apple has the courage to cannibalize their computer business into the ground quite yet. Business computer, home computer and smartphone for the price of a smartphone that will control your car and your home as well.

Or it well may be time for a Chinese company to move into electronic dominance.
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