Prediction: Google will sell Android to Samsung

Android is a failure. It does not matter if you like the OS, it does not matter if, for example, you hate Apple. Android is a failure. Yes, I know it’s the most popular – used – smartphone OS on the market right now. Does not matter. It’s a loser because, ultimately, Android is a business. Or at the very least, a business strategy. In both cases, it has failed.

Google has already dropped billions of dollars on Android. They refuse to say how many billions, exactly, though I would not be surprised if it’s close to $20 billion. The original purchase, the $12.5 billion acquisition of money-losing Motorola, the ongoing development, marketing and promotions, revenue sharing with carriers, the cost of Google Play and the licensing efforts for digital media, the cost of building apps specifically for the platform.

Add it up and that’s lots of billions of dollars. To say nothing of other costs, such as the cost of pissing off Apple to the point where Apple boots out Google Maps. Google made a strategic bet on Android and that bet has cost them dearly.

But wait! Didn’t Google just mention something about an $8 billion mobile run rate?

Yes. Made up numbers.

I’m not saying that when co-founder and CEO, Larry Page, recently said the “mobile run rate” is now “$8 billion” that he was lying. Rather, that until the numbers make their way into the signed earnings statement, they are of little value.

In the recent earnings call, Page said that mobile revenues “run rate” had grown from $2.5 billion a year ago to $8 billion. Seems like a big deal, only we simply do not know. Perhaps the run rate of $8 billion is starting…now. So, from 1 October 2012, let’s say, till 30 September 2013, mobile revenues for Google will be $8 billion.

You’ll note that Apple earned more in **profits** this past quarter!

Worse, that “revenue” number is (deliberately) murky. How much of that $8 billion goes directly back to publishers – of books, music, movies – whose work is on Google Play? We don’t know. How much of those revenues are sent to carriers, whom Google cuts deals with? What amount of those revenues comes from iPhone, iPad, Blackberry et al?

It is possible to speculate. For example, earlier this month, Opera, which offers a popular mobile browser, and runs a mobile ad network that serves some 10,000 mobile sites and which delivers a sizable 40 billion mobile ad impressions **per month**, gave us some rather surprising news: iOS dominates, yes, but Android isn’t even in second place for generating ad revenues. That crown goes to “Other”.

It’s worse. While Android generates the second highest percentage of traffic by OS, it beats only lowly Symbian for earnings per impression.

Because Google went and copied the iPhone look, feel, app approach, app market and touchscreen UI, no one can be surprised that Apple has done everything they can to limit Google’s reach on their platform. Google Maps is no longer embedded. Nor is YouTube. Apple, never an advertising company, launched iAd, and they’ve cut deals with Facebook and Twitter – not Google+ — to integrate those social media services more deeply into iOS.

Imagine, though, how much Google could benefit – and at such a lesser cost – if they were friends with Apple, not enemies? Apple is closing in on 500 million iOS devices sold. That is a massive massive audience that Google badly wants to align themselves with.

Don’t forget, as well, that revenues and profits are not the only damage Android has done to Google. Because they are the dominant search company in the world and now own the dominant smartphone platform, they are almost certainly likely to generate more government scrutiny over monopoly practices and privacy acts. Plus, we now think less of Google. Google used to stand for open. Now? They cut exclusive deals with (closed) carriers. They pick and choose which selected few company will be first to market their latest OS. They sign exclusive content deals with media houses. They, alone, decide who gets to be part of their handset alliance and they, alone, decide when to release Android, or not. Their massive Motorola purchase only exacerbates the closed nature of today’s Google. After all, you can’t run your own hardware maker and be open, can you? Hell, it seems like Google Motorola has spent the past year trying to rework FRAND patent rules.

Android has become an expensive noose around Google’s neck. They need to off-load it as soon as possible. I predict Samsung will acquire it.

Samsung is now the dominant smartphone handset maker in the world. In Q3 they sold, er, shipped, 57 million smartphones! That wasn’t simply about double what Apple shipped, er, sold. Samsung accounted for an astounding 35% of all smartphones shipped this past quarter! Plus, they are growing!

Other big Android companies, including HTC, Motorola, LG and Sony can’t seem to even generate a profit with Android!

Now picture Samsung controlling Android. In one fell swoop they knock out their Android rivals. As they scramble, Samsung takes even more market share. Plus, with full control of Android, Samsung is not dependent upon Google or carriers for updates – and fragmentation remains a chronic problem for the ecosystem.

With control of Android, Samsung can do what it’s long dreamt: control an ecosystem and all its parts. Notice how Samsung does not really show off its products in their ads, nor do they show them side by side against Android competitors. Rather, they mock Apple customers. Do not be fooled. Samsung wants Apple customers. They want those folks who spend a great deal of money and who are loyal to the platform, who use the Apple ecosystem, Apple’s iTunes, Apple’s payments. Samsung wants to be just like Apple. As long as Google controls Android that can never happen.

Google wants to own the search-maps-mobile-location ecosphere across all computers. Smartphones are computers. If they ditch Android, they can. They can focus on maps and search and other mobile-local services across platforms while not posing a threat. Win win.

Author: Brian S Hall

Brian S Hall writes about technology, immortality and food for ReadWrite, Techpinions, Unwired View and other publications. His thoughts on the 'smartphone wars' and how these are rapidly de-constructing markets, industries, business models and relationships around the world can be found on his personal site at www.brianshall.com.

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  • ziggy

    “iPhone users use way more data/surf more Web/buy more apps than Android users”

    Proof please. All we have to date is a biased data set which measures traffic based upon browser, defining Android as stock Android browser and iPhone as stock iPhone browser. Considering the number of downloads of alternative browsers in both markets I’d say there is something seriously wrong with the assumption imposed on their analysis.

    This doesn’t even touch the fact that the the analysts use uses such a limited scope of sites (10,000) and fail to define their methods for extrapolating such a small sample onto the entire set of all mobile users. I’m not saying that it isn’t possible, I’m simply stating that the data can’t be trusted without such a definition.

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    Then you would be $20 billion in the hole.

  • Mark Ranson

    Once again a flaming rant from a Apple fan boy of lies and speculation.
    I did not read the website but get just the daily emails, now I am completelyunsubcribing to this drivel that seems to spout from many of the writers on this website.
    I suggest if you feel the same way you also unsubscribe and stop reading them. There are many other tech sites out there.

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    Absolutely! In fact, that was my primary motivation for writing this post.

  • Steve Rodrigue

    Can’t wait to read your article about how Microsoft succeeded with their mobile platform in the last years…

    Market share vs money invested = Google is a clear winner.
    The more smart devices to more users = more ads prints for Google.

  • JV

    Dear Brian:

    Please stop Writing, This is the worst placing of words together to form or convey any sort of message relating to the mobile industry ever. Everyone who has come across this article and ready any or all of your words written here have now lost a little bit of themselves or soul. Please stop, Please stop conveying any sort of thoughts to others, seeing as what your peddling serves no one. The overwhelming response to these words should serve as an accurate measure of just how horrible your thoughts really are, and how you should probably stop conveying them.

    with Love,
    The Entire Sane and Competent Online World

  • Chris

    Google owns Android? Google copied Apple? Does anyone know what they’re talking about here, when Android runs the Linux kernel? How does one own something developed by the open source community? Both Linux and Android are open source. Android copies iPhone apps? Do you mean the open source developers that provide the market with comparable mobile software at a fraction of the price, or free? Definitely some hack writing. Maybe you should have made an analogy between Linux and Microsoft, because Linux has a horrible business model (being free and all)… I’m sure it is purely coincidental that Linux holds more servers than MS.

  • JDSoCal

    Only a fanboy could call Android a success. It loses money for Google, and will have to make money eventually, or be abandoned. If you do not believe this immutable reality, you are an Android fanboy, period.

  • JDSoCal

    Go look at the cell nets’ earnings releases. iPhone users buy more data plans. It’s not even close. Why else do you think they subsidize the iPhone.

  • zeth006

    It’s money loser because the author says so, right?

    I’m not a fanboy, I’m just a believer in common sense and critical thinking skills. Seriously–stop tossing the fanboy label around needlessly.

  • larrywbradley

    Uh, no. Android is not a failure and is poised to be the predominant smartphone OS if Google will simply stick with it. Eventually — and it won’t take that long — Apple screws up everything they touch. I give Apple five years, at best, before the iPhone and all other things “i” are nothing more than a niche product in a commodities market.

  • http://twitter.com/ajac09 Anthony Evans

    worst article ever take it down has no facts in it at all. Just some fat ass’s anger towards an os.

  • sean

    Wow! After all the factual information everyone provided to you above regarding ownership of Android, and you still do get it. Blows my mind!

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    I like the idea that my words can impact everyone’s soul.

  • http://twitter.com/ursulas ursula

    Wow, dude. Take a lude.

  • http://www.facebook.com/Trent8381 Trent Richards

    Google gets it’s profits from their Advertising network. I believe it currently makes up about 97% of their income. Android provides them with massive amounts of consumer data to be used in their marketing/advertising machine. Google doesn’t need Android to directly bring in profits, they use Android as a means to collect market data. Just like they will be distributing their “self driving car” systems to the major auto manufacturers in a similar manner and collecting data from those systems as well.

    Put up or shut up? Well there you have it. Did you do any research at all into where Google makes money?

  • Chris

    Jesus dude, so you bought a new iPad, don’t take your anger out on Android, learn from your mistakes.

  • http://www.facebook.com/profile.php?id=100004564663905 John Rogers

    Google wouldn’t need to sell Android to Samsung lol. Since it’s “free” and “open source” Android isn’t worth anymore than the toilet paper I wiped my ass with this morning. All Samsung has to do is make a copy of the source code and rip it apart like Amazon has done to suit its own agenda.

  • http://www.facebook.com/profile.php?id=100004564663905 John Rogers

    Android is a cancer on the mobile industry. Apple and Microsoft’s legal teams will cut it out soon enough.

  • Rex_D

    Are there no government regulations on what crap bloggers and “writers” can publish? I think at this point anyone can become a writer, there must be no screening or testing of sanity done by employers or sponsors. If you are getting paid, you should be held to a standard and responsible for the content you publish. Fines should be in order for this particular “writer”.

  • Rex_D

    And his article last week was “Microsoft Should Abandon Windows Phone”… http://www.unwiredview.com/2012/10/22/microsoft-should-abort-windows-phone/

    It’s obvious what his agenda is.

  • http://www.facebook.com/people/Ajay-Jose-Appaden/524880909 Ajay Jose Appaden

    Wow…such a waste of time…who in their right mind would ever say that google would have to sell android to stay afloat? The android ecosystem is thriving and the release of the Nexus 4, 7 and 10 just goes to prove it…those are the most powerful devices of their class on the planet (well the Nexus 4 at least and the 10 with its display)…A friend told me about this article and thats why I came and wasted my time reading it…the author is absolutely clueless and oblivious to how things work and whats going on in the real world…its like one of those numerous end of the world predictions…They never happen!!!

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    In the real world, profits matter. To date, Android has been a massive cost center for Google. I don’t see that changing.

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    There was a screening test, which I passed. After several weeks, the government approved of this article.

  • 0×566

    Of course… and Apple invented rectangles.

  • Daemon

    This article is hilarious. I sent it to some friends just so they could see how badly your readers tear you apart.

    Question for you, was your boss a former weatherman? That’s the only way I can see him pitying your utterly inaccurate predictions long enough for you to keep your job.

  • http://www.amazon.com/-/e/B002VH8ECQ Brian S Hall

    Thanks for sending it around.

  • http://twitter.com/Eli_Vate Elijah C

    You should take a couple courses in Economics. People want options and choice. It’s the reason why apple was able to raise over windows phone , symbian and blackberry. But people also want a wide variety of product options and openess , which is why windows pc’s and android aren’t going anywhere.

  • oases

    *laughs* they even marked you down 22 times for that.

  • Dylan Harlow

    Brian. PLEASE. I’M BEGGING YOU. STOP WRITING ARTICLES. You are single the worst tech “journalist” I have ever come across. You make completely unfounded claims, tell blatant lies, and kind of just say things to say them. You have to the worst sense of the mobile market I have ever seen from someone who claims to be part of this industry. Google will never sell Android. Ever. It will die before they sell it. It is their baby, and they will keep it just to spite apple, if the endless list of other reasons to have the most popular mobile OS somehow disappears. I hate you.

  • http://profiles.google.com/tonycerdais Tony Cerda

    I really don’t know sh!t about Sh!t, but I do know that the guy who wrote this is totally full of it! LMAO! Didn’t he do any research? Even a half informed person like me knows he’s talking out of his A$$hole.

  • http://profiles.google.com/sandruz.alba Alessandro Alba

    Mr. Hall pls.

  • leon81

    Dear Brian, compared to you, Steve Jobs was a chief press officer of Google.