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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 Amazon.com, 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
• 2GB RAM
• 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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By ptmmac on 2/26/2013 10:44:54 PM , Rating: -1
I realize that Samsung was much more blatant in it's copying effort with Apple on the first couple of generations of touchscreen smart phones. The S3 was as much of a copy as could be made without risking a stronger set of lawsuits in the future. The real question is: "were all the Android supporters right?" Are all smart phone purchasers equally divided between those who know how good Android is and those who buy the best known name? All Samsung had to do was get the best known name to be theirs and Apple would lose it's lead.

If this is true then it explains why Samsung rather than the also rans is making all the money from Android.

I suspect the real answer is that Samsung has the other part of the supply chain ecosystem locked up for their own phones. Being the best maker of flash, the best subcontractor for cpu's, and the best screen maker among the suppliers of phones is what really has given Samsung their advantage. Apple had their own software eco system that gave them the other side of the ecosystem lock in. Samsung made a simple bet that they could copy Apple and get away with it for the first 2 generation of smart phones. Being the best phone that was not Apple was enough to make them the go to brand for Android.

Then when Android got more mature, they could simply adapt to a less obvious copy that was close enough to the original Samsung phones and yet not exactly like the Apple iPhone. So far Samsung has taken the top spot in income from Apple and is eating the other phone makers alive. They are riding the cost curve for profitability as far as they dare to maximize their profits from the current generation. Whether this rumor is correct or not you can bet Google is not happy. The whole reason they made Android was to avoid too much power in one companies hands, and it is turning out that they cut off the head of the dragon to be left with 2 new heads that both are capable of dictating terms to Google.

Careful what you wish for, because you might get it. This is no mere class room brawl. This is a fight over the richest, fastest growing market in the whole world. To make matters worse or better convergence is making the winner here the winner on all personal computers with the tablet sales growing like they are. Trillions of Dollars are at stake and Moores Law is in a crisis. Both Apple and Samsung will thrive with the cash flow they have captured over the near term. The real question is going to be what happens when the next 2 process nodes have to be built. The capital costs for the 14 nm and 10nm should be on the order of 10-15 billion per factory. Those are staggering numbers that will once again limit the number of survivors in the game. What happens when Samsung is the last non Intel supplier of high quality chips? Are you going to be cheering for Samsung or Intel? If you are Intel do you rent the crown jewels to a direct competitor to hedge your bets? Is this why Apple is so jealously saving it's pennies for a rainy day? Or will the courts finally declare a winner in the patent lottery? Stay tuned for,"As the wireless world turns".




By retrospooty on 2/26/2013 11:04:19 PM , Rating: 2
Oh please, get over this stupid copy thing, it's just ridiculous. All companies copy that's how business works and always has. Apple wouldn't have a smartphone at all if they didn't copy Palm and Rimm. Apple copied Palm FAR more than anyone copied Apple... As it is now every single top tier manufacturer is making better phones than Apple with better features... They aren't copying, they are out innovating. Stop the Faux outrage and hypocrisy already.


"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook














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