Samsung could destroy Android. Not iPhone

Brian S Hall  By on 21 Jan 13

Forget the smartphone war between Apple iPhone and Google Android. It is in their mutual interests to achieve a semi-permanent détente, and to own this rapidly growing global market. Apple’s iPhone dominates on the hardware side, sucking up the bulk of all handset profits, while Google dominates the mobile web landscape, capturing valuable data across a billion users. A smartphone ‘cold war’ could prove highly profitable for both Apple and Google for the long-term. Think, Coke vs Pepsi, or the more obvious, US vs USSR. They were enemies, yes, but they could only assume that to destroy the other would be to destroy themselves. Each, however, could dominate their respective spheres. Only Samsung stands in their way.

Apple and Google already directly benefit from each other. iPhone users provide both more and more valuable data to Google than do Android users. In this way, Apple benefits Google. By having Google’s apps, including search, voice search and maps, which are considered better than Apple’s defaults, available to its users, Apple knows that its platform will remain the world’s most favored. Google benefits Apple.

The threat to Apple and Google – in the smartphone wars – is not from Windows Phone or Blackberry, nor from Symbian or Jolla or Ubuntu or Firefox. It is from Samsung. It is in the interest of both Apple and Google to work together, at least tacitly, to minimize Samsung’s threat.

The Rise of Samsung

One of the more interesting aspects of Samsung’s rapid rise to smartphone prominence is that they are cheered on by staunch Android fans, those who have sworn a vow of abstinence towards Apple. Why? Apple is accused of being a mere “marketing company”. Yet Samsung spends an estimated 10X more to market their devices. The oft-repeated claim is that Apple doesn’t innovate – they just take what’s already in development and put a shiny coat over it. But who is more guilty of this than Samsung? They take Google’s operating system and apps and place them inside devices that look suspiciously close to an iPhone, resulting in tremendous sales, of course, but also a series of costly lawsuits around the world.

In cheering on Samsung in their epic battle royale with Apple, I think the Android faithful have it all backwards. Samsung will not destroy iPhone. Samsung could, however, destroy Android.

True, Samsung almost certainly takes revenues and profits away from Apple’s iPhone business. More importantly, though, Samsung sucks up nearly all the profits of the Android handset market. This limits product roll-out, marketing and ongoing innovation from other ecosystem members. No profits, no business. Samsung is a threat to iPhone, no doubt, but in this case, it’s more a threat to Google and its vision for Android.

In the days when Microsoft ruled the personal computing landscape, there was a healthy ecosystem of partners that made a great deal of money. Intel, obviously, but also HP, Dell, and a litany of other hardware and software companies. Years into Android, however, and profits flow almost exclusively to one company – Samsung.  Could Windows have survived if the only company that made any real money was, say, Compaq? Not even Microsoft itself? Such is the situation that now exists with Android, and it is not a healthy one. Why should HTC or LG, for example, not direct more and more of their efforts toward Windows Phone, or some other Android alternate? How many years will hardware companies continue to make Android devices while earning close to zero profit?  This is an untenable situation. Apple is not preventing HTC or Sony or LG from succeeding with Android, it is Samsung.

One-sided Relationship

The purpose of Android is to ensure Google can embed its numerous data-collecting services on as many devices as possible. Google captures more and better data on everyone, which they then sell to third parties. In this way, Android is an extension of Google’s business model from PC to smartphone. Despite years of development, however, and billions of dollars spent to grow the ecosystem, most of Google’s mobile revenues comes from Apple iOS devices – iPhone and iPad. Despite cries that Apple is “closed” and iPhone a “walled garden”, Apple has done nothing to stop or otherwise limit Google from placing its services on iPhone. And why should they? Apple’s revenues come from hardware sales. Google enhances Apple’s iPhone appeal. Despite the fact that many choose sides, the truth is that Apple and Google can easily co-exist.

I am not convinced that Google can so easily co-exist with Samsung, given the current one-sided relationship. Samsung used Android to become the world’s leading seller of smartphones. They offer little in return to Google. Samsung happily sells ‘Android’ devices in China – all without Google. Samsung continues to work on Tizen, a competing mobile OS that is also supported by Intel and several large carriers. Samsung is working on its own program to ensure its devices meet standard enterprise security requirements – not Android devices, but Samsung Android devices. Samsung hopes to offer their own digital media platform, a direct competitor to iTunes, yes, but more directly to Google Play.

Samsung does nothing to promote Android or Google. It is nearly impossible to find any commercial or marketing announcement of a Samsung smartphone that mentions either Android itself, or shows off any Google service. Samsung promotes its brand first, then the Galaxy line-up, never Android. Indeed, their television ads typically focus only on Samsung-specific applications.

Apple has shown that it can compete against – and withstand assaults from – Samsung, specifically, and Android, generally. However, all other Android competitors have not yet shown that they can fight Samsung. If Google wants to preserve the Android ecosystem, they cannot allow this situation to continue.  An Apple – Google smartphone détente will benefit both companies. Samsung is a threat to each, but more so to Google and Android.

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  • gaunzo

    Screw Apple.

  • Jms579

    This is a complete load of crap. Android has 72% of the global smartphone market. Samsung has a little over 30% of the global smartphone market. (apple is expected to peak this year at 22%) so how can this idiot figure samsung is hurting other android sales? Does the other 42% of android sales not really exist? And how exactly does apple users provide more data to google than three times the number of android users? Who wrote this article? Mitt romney? Cuz the math just dont add up!

  • cuscus

    Very nice journalism. Looks like the modern version of Charlie Chaplin.

  • Szym

    that dude is pure idiot.

  • Lucas

    This guy sucks. He is just an Apple fanboy who thinks journalism is writing what he wishes to happen. He still dreams of iPhone domination, and hates Android as hell. He believes that users wouldn’t care of an Android-forked smartphone OS without Google Apps like Gmail, Google Search, Google Now, Chrome, Google Maps, Google Talk, Google Play, Sync, YouTube.

    He probably doesn’t even know that those apps are closed source, licensed by Google for exclusive use on APPROVED Android devices; that means, a Samsung fork would be simply forbidden to have some of the most important apps of Android, including Google Play.

    Can you imagine Samsung being able to provide all needed cloud services Google provides? Apple Maps proved that even iPhone can’t live without a native Google Maps app and Windows Phone users suffer from not having YouTube, Gmail or GMaps dedicated apps.

    PS: China has been out of Google services for a long time, they wouldn’t miss Google on a Smartphone at all. That’s not true for (mostly) the rest of the world, specially United States. So, bad argument.

  • http://www.brianshall.com/ Brian S Hall

    You compare me to Charlie Chaplin then in no way do you insult me.

  • http://www.brianshall.com/ Brian S Hall

    As has been shown time and time again, nearly *all* the profits in the Android handset industry flow to one company, Samsung. That is the sign of an unhealthy ecosystem.

  • JoonHoKim

    Google collects data just as valuable from Samsung users on Android. That’s a good thing for Google.

  • http://www.brianshall.com/ Brian S Hall

    This is simply not true. Google has testified that they make more from iOS data than from Android data. iOS data is more valuable.

  • http://twitter.com/M_ANAS TheBitBucket

    what a load rubbish?

  • http://twitter.com/M_ANAS TheBitBucket

    you missed the point again, he is not insulting you, he is insulting your writings.
    Charlie Chaplin makes us laugh.. same here when we read your article we LAUGH… got the point?

    in another word stop writing about technology and write comedy and keep the morning job.

  • http://twitter.com/zabihjan Zabih

    i have said it times and times again, the authors in this web site are all Isheeps, they cant get enough of bashing Samsung and Android. All they do is hail IOS cuz they are jealous of how innovative Smasung and Android Can be. and how the heck most of android apps works on screens of all sizes while IPHONE 5 own Photo app is not fit for iphone 5 screen size so forget other apps.

    Samsung original Galaxy S may look like iphone 3gs but after that phone all their phones look unique and one of a kind.

    i dont own samsung now, i have Nexus 4. i just made my Galaxy S2 retire.

  • http://twitter.com/zabihjan Zabih

    may be in your dreams. walk around London and all you hear all over is the Whistle tone? do you know which phone comes with Whistle tone? I bet you do

  • Mohan

    Totally flawed & bias review from an iDiot.
    1) How did Apple sales benefited Google?
    2) What does it matter to Google which manufacturer of the hardware uses Android when the OS is FREE to ALL manufacturer?
    3) Would Apps developer take any notice of the Android OS if it did not reach such a dominating market share?
    4) Why did Apple target their law suits against Samsung rather than Google – when Apple’s thermal nuclear war according to Jobs is against Google?

    5) How would it benefit Google if Samsung (with 30% share) drop Android?

  • enyibinakata

    Please which phone has the whistle tone ? thanks.

  • enyibinakata

    Brian, how about you write an article on iOS without the constant comparison to Android. Makes you look desperate for clicks and fans the flames of fanboyism hence not productive by any means.

    About time you gave the community something of value – as we know you can. Enough of the juvenile articles please.

    Thanks.

  • http://evildevnull.com/thinktank/index.php?action=collapse;c=14;sa=collapse;d227fb2388ec=9e8bb86861f0686e54bcbaae99929bbd#c14 George Leon

    Yeah, if you think recent Samsung devices are nothing but “existing stuff dressed up in a shiny package that looks suspiciously like Apple’s products”, then you have not spent any real & unbiased time with a Samsung device lately.

    Firstly, I will openly admit that I hate Apple. I will also tell you that I spent a decade disliking almost anything that wasn’t from HTC, whom was a device pioneer, regardless of what you think of Apple or anyone else. I disliked Samsung only slightly less than Apple. However, HTC lost the way somewhere about four or 5 years ago & more importantly, they gave up on marketing & started providing sub-par customer service, with slow updates to existing devices, if they got updates at all.

    However, recent Samsung device have been seeing updates more frequently than any other non-Nexus device & they are packed with innovative & ultra-useful features, like the S-Pen, which convinced me that a modern stylus still has not outlived it’s usefulness, multi-window & multi-view features, that are absolute time savers for anyone that constantly is sending out reports or emails that rely heavily on reference materials or other reports & to then be able to add further comments to those reports, highlighting issues or excellent strategies & being able to send that effortlessly, is a priceless feature. Also, being able to view a competitors product, use the S-Pen to clip & share strengths & weaknesses, well, that is also a wonderful ability.

    Been away from your desk without your phone? You reach for the Note 2 & a notification screen shows if you have missed anything while away. Gesture & motion navigation, Toggles for functions that can be customized & that take you directly to the function settings with a long press. Image sampling that adjust screen display output to save battery life, notification if you walk away & leave your S-Pen on a counter. AllShare, Best Face camera mode, etc…

    As much as it killed me, I finally had to admit that Samsung’s latest devices are not just full of novelty features that make you say “WOW!”, they are also full of features I use daily, things that make me more productive, more efficient, features with real world function that can’t be found anywhere but on a Samsung device, features that Samsung is expanding on & that even other developers are starting to support, adding multi-window & multi-view support to their apps.

    As far as tablets go, the Note 10.1 may not have the Retina display or that of the Retina besting Nexus 10, but it is still very nice & a trade-off necessitated by the addition of the S-Pen, whose functionality I would chose over videos & games that are a bit crisper. I’ll tell you, since the Note 10.1 update to Jelly Bean 4.1.2, I have hardly used my Nexus 10, or the Windows tab I also own. Even the Galaxy S3, with it’s recent Jelly Bean update, just offers more usable features that just are not to be found on anything Apple, HTC, Sony, or any other OEM offers. As a user, poweruser, that bases his decisions on productivity, not gaming or entertainment, Samsung is hands down the most innovative manufacturer currently. Although, I will also say, in terms of entertainment, the Samsung devices support a host of containers & codecs, including surround sound encoded HD DIVX files, AAC, AC3, FLAC, etc…

  • http://www.brianshall.com/ Brian S Hall

    Thanks for the comment though I think you help make my case. What separates Samsung from the pack is not Android. I still say Samsung is a threat to the Android ecosystem.

  • http://www.brianshall.com/ Brian S Hall

    Charlie Chaplin is a hero of mine. He made us laugh, cry, think, question our views and values. The comparison is highly complimentary.

  • http://twitter.com/zabihjan Zabih

    Samsung Galaxy Range ofcourse

  • JDSoCal

    If my business model was giving away $5 bills to know what Websites you visited today, I’ll bet I could get near 100% market share. But would you like to invest in my company?

  • DelusionalAppleBot wrote this

    what kinda fuckin arsehole wold write something like this… Sad bastard

  • Team Android

    #DelusionalAppleBot & Full Time Sad Bastard you are Sir

  • Android

    #DelusionalAppleBot & Full Time Sad Bastard you are Sir

  • http://twitter.com/zabihjan Zabih

    fantastic review of Great Devices

  • Yehat

    What a bunch of losers … You, Samsung-o-bots, think that whenever somebody makes a piss on you, that it just rains, isn’t it?

  • lol

    follow the news much? Apple will destroy apple because… They do not innovate. Coming from a previous iPhone user, gs3 and now nl920

  • Boaz Thomassie

    just get Nexus’s devices. I love my Nexus 4 & 7, wouldn’t buy anything else

  • gareth2w

    Apple sales benefit Google because Apple does not compete with Googles advertising business, instead it is happy to feed it (since Apple only cares about hardware sales).
    Google isn’t a software company, their software is free only because they want to direct as many people to their advertising business, its just a hook for the fish.
    Its an interesting peice since Samsung is the only player making major profits (Sony is next and they have a small but decent profit). If they did go with bada+tizen and drop Android then they could start by cutting Google out of the data feeds and doing their own advertising business, with a massive chunk of the market and large profits to handle it they would have a great positon to start from.
    Even partnering up with someone like Microsoft would make sense there too, they could get favourable terms combining with Bing and earn more money that way then letting Google scoop up all the profits.

  • peter123

    “Samsung happily sells ‘Android’ devices in China – all without Google.” You’re referring to android devices without google services?? How can that be is samsung is part of OHA? Source?

  • jimbo

    we’ll see.
    just as motorola startac begat nokia 8260 begat motorola razr begat rim blackberry begat apple iphone begat samsung galaxy; with the pace at which smartphones are getting canabilized, i wouldn’t be surprised to see samsung replaced by huawei or zte within 2 years.

  • http://post404.com/ Randall “texrat” Arnold

    He’s a realist. Look at how many ecosystems Samsung is toying with. They have no allegiance to Android. Odds are if they can be successful with Tizen, they’ll gladly abandon Android.

  • Keermalec

    Agreed with most commentators. Brian your article is a load of BS. You mention astounding things and then forget to indicate your sources. Like:

    “iPhone users provide both more and more valuable data to Google than do Android users”

    “Samsung spends an estimated 10X more to market their devices”

    “Samsung sucks up nearly all the profits of the Android handset market”

    “How many years will hardware companies continue to make Android devices while earning close to zero profit?”

    “most of Google’s mobile revenues comes from Apple iOS devices – iPhone and iPad”

    “Samsung hopes to offer their own digital media platform, a direct competitor to iTunes, yes, but more directly to Google Play.”

    “Samsung does nothing to promote Android or Google”

    Your analogies are also plain weird:

    “US vs USSR. They were enemies, yes, but they could only assume that to destroy the other would be to destroy themselves.”

  • http://twitter.com/M_ANAS TheBitBucket

    whatever dude, if you cannot see how many people criticizing your article then it is your problem.

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