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Somewhere Tim Cook and Stephen Elop are laughing

The Wall Street Journal is reporting that Google Inc. (GOOG) is holding an emergency summit at the 2013 Mobile World Congress (MWC) in Barcelona.  At the mobile industry's top trade show, Google is reportedly meeting with Android phonemakers like HTC Corp. (TPE:2498) and Hewlett-Packard Comp. (HPQ) about fighting back to prevent Samsung Electronics Comp., Ltd. (KSC:005930) from gaining too strong a dominant position in the Android market.

I. One Company to Rule Them All?

Samsung currently accounts for 40 percent of Android sales -- more than any other company.  It's also easily the most profitable of any Android device-maker.

Some analysts think Google is fearful that Samsung will leverage its powerful position to try to get a bigger cut of Google's slowly growing mobile ad revenue stream.  Sources claim that Samsung currently gets around 10 percent of the revenue from clicks on its devices.  A bump to Samsung's take-home percentage could help offset per-device payments it has to make to Microsoft Corp. (MSFT) for intellectual property licensing.

Google hopes to make $8B USD in 2013 via mobile advertising on Apple, Inc.'s (AAPL) iPhone and Android.

Andy Rubin
Andy Rubin reportedly warned Android phonemakers not to let Samsung get too powerful.
[Image Source: The Next Web]

At a closed-door event, the WSJ reports that their source was in attendance and heard a presentation by Android Chief Andy Rubin.  Mr. Rubin allegedly praised Samsung's success, but warned that it could be a "threat" if it furthered its dominant position.  Google is reportedly eyeing offerings like HP's $169.99 USD upcoming Android slates.

Samsung in 2012 was the biggest smartphone shipper, shipping 215.8m smartphones, almost all of which ran Android.  By contrast, Apple "only" shipped 136.8m iPhones.  Samsung hopes to ship 390m smartphones in 2013.

In 2011, Samsung only accounted for 15.6 percent of Android tablets, but in 2012 it advanced to 27.9%, becoming a major player according to Interactive Data Corp. (IDC).  Samsung passed, Inc. (AMZN) in Q4 2012 to become the largest Android tablet seller (Amazon uses a modified Android build in its "Fire" tablets).  Samsung just revealed the Galaxy Note 8.0, a hot tablet that is vying with Apple's iPad Mini.

II. Samsung Could Seek Alternatives

If Samsung reacts badly to Google's efforts to keep it in check; it could jump ship to one of a couple rising platforms.  It already has made Windows Phone devices and has a good relationship with Microsoft Corp. (MSFT).  Alternatively, it could opt to test the waters with a Mozilla OS device (Samsung's South Korean counterpart LG Electronics, Inc. (KSC:066570) is doing precisely that).  And then there's Tizen, a mobile Linux kernel that Samsung is co-developing with Intel Corp. (INTC).

For now, Google and Samsung are united by their common enemy: Apple.  Samsung will launch its counterstrike against the iPhone 5 on March 14 -- the Galaxy S IV.

Samsung Galaxy S IV
In March Google and Samsung will collaborate on the massive Galaxy S IV launch.
[Image Source: AndroidSpin]

A leaked spec sheet has been circulating which claims the hot handset will pack:

• 4.8-5.0-inch 1080p display
• Android 4.2 Jelly Bean
• 1.9GHz Qualcom Snapdragon 600 processor
• 16/32/64GB storage options
• Removable SD card slot (up to 64GB)
• 13MP rear-facing camera, w/ "Orb" technology for compressed panorama shots
• 4G LTE support
• Multi-purpose / Dedicated camera button
• Bluetooth 5.0
• 3100 mAh battery

Will the Galaxy S IV be the last major effort between Google and Samsung?  It's possible, but at this point it's likely the pair's ties that bind are stronger than those that separate.

Source: WSJ

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RE: Android is winning (C) Tony
By Pirks on 2/26/2013 5:27:01 PM , Rating: 2
Did he really predict $1000 Apple stock? When?

Tony, did you predict it?

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 5:48:20 PM , Rating: 3
Yes he did, here on this site back around when it hit 650-700 in 2012. Not that everyone can get them all right, but to think Apple will keep growing endlessly forever is crazy. At that rate they would have owned everything on Earth by 2025. It had to level off at some point.

RE: Android is winning (C) Tony
By Pirks on 2/26/2013 6:08:54 PM , Rating: 1
Well, if he was indeed predicting it then I was wrong about his precision. I'll ask him about it when he's around. But at least seems like he nailed Android fork alright, happening exactly as Tony predicted.

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 6:54:10 PM , Rating: 2
HE did, and you were... But that's irrelevant to the point. If there is a fork, then its a good thing, not a bad thing. Samsung's success forces the rest to raise the bar. Collectively, Google isn't happy with the phones out there, so they are raising the bar themselves and doing the X phone... Freegin awesome. More players, more options = better for consumers. As a current Android user, I couldn't be happier if it happens. Still a big if though. So far all that has happened is nothing.

RE: Android is winning (C) Tony
By Lord 666 on 2/26/2013 7:54:50 PM , Rating: 2
Actually your theory "more players, more options" goes out the window by the sheer fact Google is having the meeting. Samsung has nailed down the Android execution of device deployment, marketing, and end user experience. What other mainstream vendor has done so?

Taken to an extreme, too many inferior choices dilutes the Android brand. Honestly, Google should be happy with what Samsung has done. I would even say that Samsung has too many inferior choices other than the Galaxy and Note series.

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 8:31:42 PM , Rating: 2
Competition isn't good and raising the bar to try and match the best performing player isn't good by the sheer fact that Google had a meeting that we really don't know the purpose of?

I don't get the logic. We as consumers can't lose with that. How is it in any way a bad thing for us?

RE: Android is winning (C) Tony
By Lord 666 on 2/26/2013 8:57:58 PM , Rating: 2
Competition is great as long all parties are equally attempting to innovate and improve. With Samsung running away with the show, its not really competition, but more of an NFL team versus a HS one.

Taking the NFL analogy one step further, I see this secret meeting more of a "come to Jesus" chat between Google and other OEMs that aren't named Samsung to raise the bar. Imagine if the NFL had two good teams and 30 crappy ones. No one would be interested in watching and another brand would innovate make the NFL obsolete.

BTW, the current RAZR series made me put down the BB after all these years. I see the three current Android situation as only three OEMs; Samsung, Google, and Google owned Motorola.

RE: Android is winning (C) Tony
By Reclaimer77 on 2/26/2013 9:02:55 PM , Rating: 2
Uhh HTC and LG have some fantastic Android phones. You're overstating the situation a bit imo.

Yes in a perfect world everyone would have an equal share of the pie. But in the real world, Communism doesn't work.

RE: Android is winning (C) Tony
By Pirks on 2/26/2013 9:30:42 PM , Rating: 2
HTC and LG have some fantastic Android phones
And you forgot real nice Sony Experia line why? Ya lamo :)))

RE: Android is winning (C) Tony
By Pirks on 2/26/2013 9:34:39 PM , Rating: 1
fuck. I meant Xperia of course.

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 9:50:31 PM , Rating: 2
Are you kidding? Seriously the best phones lately are the Xperia Z the LG Optimus pro, The HTC one, oppo and huawei have some great ones too. Samsung is playing catch up at this point. The S4 looks like another face in the crowd and a late one at that... Then again, wait for the Google/Moto X.

If you ask me Samsung's success has really made the others raise the bar. Every single 1 of those phones above is smokin'

RE: Android is winning (C) Tony
By Spuke on 2/26/2013 10:58:23 PM , Rating: 2
Seriously the best phones lately are the Xperia Z the LG Optimus pro, The HTC one, oppo and huawei have some great ones too.
That HTC One is SERIOUSLY good. That camera is ridiculous. I had no idea.

RE: Android is winning (C) Tony
By Mint on 2/27/2013 7:56:27 AM , Rating: 2
I'll have to reserve judgement.

Bigger pixels with lower resolution doesn't intrinsically have better image quality under low light than pixel binning, unless sensors lose a lot of photons at the borders (which I don't think is true). Under bright light, resolution wins, especially if you want to crop with these zoomless lenses.

If the OIS works well, the One's camera will be in the running with the Lumia 920, but I don't see how it's "SERIOUSLY good" at this point.

RE: Android is winning (C) Tony
By Reclaimer77 on 2/27/2013 9:14:27 PM , Rating: 2
HTC lost me with their idiotic decision on the One to arbitrarily remove Android buttons that I've been accustomed to for years. What's next, one button? Sounds like the Apple philosophy to me, and I do not hold to that. Don't they realize that's one of the best parts of owning an Android phone? The convenience of those keys!

Why? Just why did they do this? It made an otherwise great phone a total deal-breaker!

RE: Android is winning (C) Tony
By Reclaimer77 on 2/27/2013 9:30:24 PM , Rating: 1
And to elaborate this happens EVERY time I look at an HTC phone. There is always one thing they completely fuck up for some reason that keeps me going back to Samsung. Just fucking get it right HTC! How hard is it? Was it really more important having a non-functional big fucking ass HTC logo at the bottom where the goddamn search button should be? WAS IT!!!

/I should lay off the hooch while blogging...

RE: Android is winning (C) Tony
By Mint on 2/27/2013 8:27:43 AM , Rating: 2
I assume the S4 will stick with the removable battery and microsd slot that has been a staple of the S series, so that's one distinguishing point.

I do agree with you that they're making everyone raise their game. The multiwindow mod to Android is a big deal as well.

RE: Android is winning (C) Tony
By synapse46 on 2/27/2013 11:49:42 AM , Rating: 2
I like my S3 very much, but I must admit that my girlfriends optimus G is a superior product. Initially she had battery issues, but this was alleviated by disabling some unknown carrier services. Now the LG gets the same battery life as my S3 running a custom rom and kernel. The screen on the LG looks better than the S3 and is also substantially more efficient, loosely gaging from battery stats.

I think a large part of Samsungs success is from advertising and better command of their supply chain over other android phone manufactures.

RE: Android is winning (C) Tony
By ven1ger on 2/27/2013 5:33:46 PM , Rating: 2
Just because Samsung is the top Android maker doesn't mean that the field isn't open for others to put out competing products. Samsung is producing some of the best products but at a premium price, others could easily come in with lesser features, not everyone needs the best, and inexpensive. I don't see much problem have tier one devices makers like Samsung, HTC, LG and others improving and offering their best at premium prices, but I can also see tier two or tier three device makers producing quality phones. Not everyone needs the best camera features or the most pixels, and there are those picky about the size of their devices, so there is a lot of room for a variety of device makers to offer up different options.

RE: Android is winning (C) Tony
By robinthakur on 2/27/2013 11:05:56 AM , Rating: 2
Yes, but it is little things like When Google mandated that the Menu button gets swapped for a multi task button. Samsung didn't implement it on the Galaxy 3 because they didn't want to do it, and there is no way to fix this in software (easily) unlike on the HTC One. Little things like this give precedence to how Samsung would behave if it could get its way. Of all the companies that might become monopolies, Samsung is the one I fear most as whenever I've had issues with their products, (fridge broke down, TV stopped switching on, dust under the camera unit on a SGS3) the support and service is shockingly rude in the UK.

RE: Android is winning (C) Tony
By NellyFromMA on 2/26/2013 10:14:04 PM , Rating: 2
How is that a good thing if you are a business partner with Google. How in any way does this legitimize Google as a good business partner?

Be successful, just don't be too successful?

It's counter productive to addressing Android's weakness, fragmentation.

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 11:10:16 PM , Rating: 2
Who cares about partners or Google or Samsung or Apple? It's good for consumers. Remember, people like you and I who buy the products?

Somehow the conversation always turns to who makes more money, when what its really about is what products we can buy and what the price points are. Competition is good for consumers, to hell with with the companies.

RE: Android is winning (C) Tony
By retrospooty on 2/26/2013 11:15:05 PM , Rating: 2
"Be successful, just don't be too successful?"

And by the way that's pure conjecture. If there was any meeting like this, it's not going to be about putting Samsung down, Google is not stupid enough to put down their biggest partner. If they're going to do anything it's going to be to try and get the other makers to raise the bar, not to hamper Samsung... This is also a good thing for consumers

RE: Android is winning (C) Tony
By Spuke on 2/26/2013 10:54:22 PM , Rating: 2
At that rate they would have owned everything on Earth by 2025

RE: Android is winning (C) Tony
By Tony Swash on 2/27/2013 9:14:59 AM , Rating: 1
I did and I sure wish I hadn't ;)

I guess the lesson is that the two things one should never do is bank on Wall Street making rational decisions and buy a handbag for a woman without getting very, very precise instructions.

The way the whole Google - Samsung relationship pans out is going to to be very interesting. I am assuming that Samsung will retain, and possibly enhance, it's predominant position in the Android handset market for the immediate future. If that is the case then both Google and Android have a kill switch on each other's mobile strategy although Samsung's is the more lethal. If Samsung either forks Android or migrates to another OS taking it's customer base with it, or a mixture of the two, then Google's Android strategy is dead in the water. All of Google's work building Android will, in those circumstances, will have resulted in them being reduced to almost compete reliance on iOS for mobile revenue, a position Android was meant to avoid. Google can use it's Motorola division to build alternatives to Samsung's offerings but that endangers it's relationships with all Android OEMs or it could shut Samsung out of future Android iterations. Both are risky propositions. I think Samsung has the stronger hand here

Samsung's strategy may well be a repeat of the play book they have used so many times before, in particular in relation to Apple, which is to become the major player in the supply chain, watch what is coming down the pipeline via advanced orders and thus gauge the size of potential future markets, invest in production facilities using customer revenues, and then enter the market with their own products sold in competitor with their own component customers. Everybody seems to be copying Apple's vertical integration strategy (Surface, Nexus, Kindle, etc) and Samsung seems to be moving down that path rapidly and the next big step would be to control it's own OS and to control (and earn income from) it's own service stack.

A more general point about the handset market is how the supposed commodification of the hardware layer and the move of value to the software layer has not happened. The only two companies making money in an exploding and hugely lucrative mobile device market are both vertically integrated hardware device makers. This is an interesting article:

And these two graphs from that article tell the whole story more or less.

RE: Android is winning (C) Tony
By Pirks on 2/27/2013 3:30:44 PM , Rating: 1
Thanks for being honest Tony :) I disagree on Wall Street being irrational though, looks like Apple stock indeed did not deserve to hit $1000, not because Wall Street is crazy but because Google and Samsung put up an excellent fight against iPhone and started to mount a serious pressure on iPhone in 2012, and Wall Street just reflected this phenomenon in the Apple's stock price.

Besides, the whole market for smartphones and tablets became much more crowded with Google, Samsung, Motorola, BlackBerry, Microsoft, Sony, HTC and LG offering quite polished products. They all learned from Apple's tight integration, strong retail presence and overall product polish and started to catch up. So Wall Street eventually realized that the huge gap between Apple and the rest of the pack just got narrower.

I can tell you that I tested quite a few smartphones myself, including playing with a BB Z10 recently - the gap between older generation of Android 2.3, WinPhone 7.0, BB7 and their modern versions - Android 4.1, WinPhone 8.0 and BB10 is a huge generational shift, for ALL of them. It's like Apple gave a huge jolt to all the sleepy OEMs in the world and everyone suddenly realized Apple is an existential threat, so all of them, including BB and MS and other similar slowpokes/former monopolists - all of them started to move real quickly now, MS suddenly realized that stuffing old Win95 shit into phones won't cut it, BB dropped their MS-DOS-in-the-phone called BB7 and reinvented themselves with QNX which is real slick and a joy to use now, especially for productivity/office people, businessmen who multitask and jiggle many things in their phone, BB10 is solidly pwning everyone including WP8 and iOS in those areas.

Wall Street is not dumb and they have noticed all this and... they noticed that while other sleepy OEMs underwent huge generational leaps (Android 2.3 to Android 4.1 is also a kind of generational leap) Apple did NOT do anything like that. There is nothing to improve in Apple products, they can only iterate and hone them but that's it. iPhone 5 is not a revolution or even a substantial improvement. You take 4S and 5 in your hand and... they are all the same. The difference between WP7.0 and WP8.0 is huge, the difference between BB7 and BB10 is even more than huge, this is a reinvention of everything from scratch, no less. But new iPhone? Nope, that's the same stuff but with a bit more pixels and shaders inside.

So don't blame Wall Street Tony, they just reflect the real world facts. You failed with a prediction of $1000 stock, and you failed with a prediction of total iPhone 5 domination, and later you will understand all this. Probably Steve Jobs's death played a role here, without him who's going to give us another jolt of revolution? Cook is a good CEO but he's a "hone the product" kind of CEO, not the "invent new market where no one ever dared to go" kind of CEO.

When you will understand this, Tony, you will stop making stupid predictions about $1000 stock and all. Good luck with that ;)

RE: Android is winning (C) Tony
By retrospooty on 2/27/2013 9:47:57 PM , Rating: 2
It's pretty rare that I agree with you Pirks, but on this I certainly do. Everyone and their mother, and the entire stock market and the entire industry can see that Apple is stagnating. Pretty much everyone but Tony and other die hard fans see that. He keeps saying "oh well they just had a profitable quarter so all is well". Ask RIM in 2010 how profitable quarters work for them. They need to start moving now, before they get lapped.

RE: Android is winning (C) Tony
By Lord 666 on 2/28/2013 4:42:59 AM , Rating: 2
Apple's innovation died on 10/5/2011. Unless they have discovered the secret to bringing back the dead or communicating with them beyond the grave, the run is up.

RE: Android is winning (C) Tony
By retrospooty on 2/28/2013 7:30:16 AM , Rating: 2
I obviously get what you are saying, but even when he was alive, Apple hadnt released anything innovative since the original iPhone in 2007. Since then its been tiny improvements each round while the rest of the industry caught up and then surpassed them.

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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