Can Samsung benefit by breaking away from Android?
The idea that Samsung and Google are locked in battle for the soul of Android won’t go away. Thus far it has been a symbiotic relationship that has propelled the platform into millions of people’s lives. Which of them is getting a better deal out of it is not an easy question to answer. As it stands they have both reaped huge rewards. Why would either one of them want to sour such a productive partnership?
There are many reasons that talk of Samsung breaking away persists, and it does have some foundation, but it’s far from definite, and if it does happen, it certainly won’t happen overnight.
Is Galaxy bigger than Android?
More than four out of every five smartphones sold in the third quarter of 2013 were running Android, according to IDC. Samsung is the biggest smartphone manufacturer in the world by a distance. The South Korean giant accounts for almost a third of all the smartphones sold worldwide. If we take a look at Gartner’s third quarter results for 2013, Samsung is top of the chart with 32.1% of the market, Apple is second on 12.1%, and Lenovo came in third on 5.1%. Google and Motorola are nowhere to be seen in the top ten.
This time last year the news that “Galaxy” had surpassed “Android” as a popular search term in the U.S. was taken to be a significant sign of Samsung’s dominance (Android still trumps Galaxy if you search worldwide). It’s common for people to talk about getting a Galaxy now, and it’s no wonder when you consider Samsung’s marketing spend. If you cast your mind back to 2009 you’ll remember that this happened before when the Droid brand briefly overtook Android.
Is this a disastrous thing for the Android platform? Some commentators certainly thought so, but here we are a year down the line and what has changed? Samsung’s dominance has grown, but the real question is whether a consumer would buy a Galaxy, regardless of the OS, over an Android.
Speculation about Samsung’s future with or without Android keeps coming up, and there are reasons for that. You can interpret them as definite proof that Samsung is hell bent on emulating Apple by gaining control over the hardware and the software, or you can argue that the company is pragmatically hedging its bets with a plan B.
There has been talk of a rival platform from Samsung for quite some time now. Bada was demonstrated at MWC in 2010 and by the first quarter of 2012 it hit a high of 2.7% worldwide smartphone market share. By that time Tizen was on the scene and Bada was quietly folded into it.
Tizen is ostensibly an open source platform and various companies are members of the Tizen Association, including Huawei, Intel, Panasonic, Sprint, Orange, and Vodafone, but Samsung is in the driving seat. It’s not entirely clear how much of Samsung’s contribution comes under the open source license. Samsung’s ownership of the “open source” Tizen platform actually looks a lot like Google’s ownership of the “open source” Android platform.
The expectation that Samsung will release a flagship smartphone on the platform is growing, and MWC next month could be where we’ll see it, but is Tizen a match for Android? The short answer is no. It takes years to refine a platform and develop a good base of apps and games. That process has certainly begun for Tizen, Samsung has been offering some serious carrots to attract developers, but it is still far behind Android and it will need a solid USP or two to make gains.
Samsung apps not Google apps
The first Samsung Developer Conference was held in October last year and saw the company release five new SDKs (Software Development Kits). The event also enabled Samsung to pull together the strands of its growing ecosystem regardless of the platform running underneath.
Anyone who has bought a Samsung phone and seen a stock Android device knows all about Samsung apps. The manufacturer has been differentiating itself from the Android pack and adding value through its TouchWiz overlay and a range of pre-installed software. Wherever possible Samsung seeks to usurp Google and replace its apps. We have S Voice, S Memo, Samsung Wallet, S Suggest, WatchON, Samsung Hub, the list goes on.
Samsung has also created the Magazine UX for its new line of tablets. Critics are suggesting it looks an awful lot like Windows 8, but Samsung has already claimed that consumer demand is behind the new look. There’s certainly a case to be made for improving the Android tablet experience. Google has been relatively slow to address this issue for Android, but the new UI isn’t just about making things more user friendly, it also affords Samsung another opportunity to push Google’s Play Store and apps into the background and put Samsung’s offerings front and center.
Everyone does this
When there’s talk of Samsung edging Google out, it’s important to remember a couple of things.
Firstly, every manufacturer does this to some degree. In the Android space OEMs have got to differentiate and they generally do that by adding their own software and UI on top of the platform. If they’re in a position to offer content directly, like Sony, for example, then they’ll do it. Of course they’ll try to persuade consumers to buy things from them and not from Google; they want to make more money.
Secondly, Google is not Android. Samsung can gain by breaking away from Google without ditching Android. If you really consider Android as an open source platform then it’s clear that Google is doing the same thing as the rest of the OEMs. The exclusivity of the Google Experience Launcher on the Nexus 5 is the clearest signal of this yet. How is GEL any different from Sense or TouchWiz?
A fork in the road
Samsung is very unlikely to abandon Android. Perhaps at some distant point in the future its focus will shift to another platform, but not until that platform has a decent market share. It would not benefit Samsung to ditch the platform today and that’s reason enough not to do it.
Right now Samsung has two options with Android, it could fork it like Amazon and give up Google services, or it could continue as it has been, edging its own UI and apps front and center and pushing Google into the background. The Google Play edition of the Galaxy S4 suggests it will continue to work with Google for now. If Samsung is anything, it’s pragmatic. Even during a bitter dispute with Apple, Samsung continues to supply parts to its biggest competitor, and it shows no desire to end that relationship.
Driven by profits
Samsung’s Android smartphone sales are phenomenal. All this talk of “disappointing” S4 sales ignores the fact that Samsung is shifting millions of units. The only disappointment is that it isn’t hitting ridiculously high expectations by selling twice as fast as the S3. There’s a big difference between failing to meet extremely ambitious targets and actually failing, just ask Apple.
If profit is Samsung’s basic motivation, and it clearly is, then there’s little to gain by breaking away from Android at the moment. Avoiding having all your eggs in one basket is a different matter, that’s just common sense. There’s no reason Samsung can’t build the Galaxy brand on top of multiple operating systems.
Samsung vs Google
While Samsung is not about to drop Android completely, there is a storm brewing. The symbiotic relationship between Google and Samsung is all well and good, while both benefit. The companies actually want different things, though, and that could be a real problem. Google wants to own your data and Samsung wants to sell hardware, and Android has been a useful vehicle to deliver for both up until now.
If Samsung makes moves to cut Google services and apps out, as it is doing with TouchWiz, Magazine UX, and the Samsung Hub, then Google stops benefitting from Samsung’s success. If Google releases amazing hardware at knock down prices and optimizes the Android experience for lower-end hardware, as it is doing with the Nexus 5, Moto G, and Android 4.4, then Samsung’s profit margin is squeezed.
A recent New York Times piece talking about Samsung’s fourth quarter decline in earnings cited analysts at Sanford C. Bernstein pointing out Samsung’s average smartphone selling price has dropped to $290 from $320 a year ago. Google is definitely making moves to combat Samsung’s dominance and we can expect the world’s biggest smartphone manufacturer to come out swinging.
With a refresh for the Nexus 10 long overdue it will be interesting to see if Google switches manufacturer and we can expect a real statement of intent from Samsung around MWC.
To answer our original question, Samsung doesn’t really stand to gain by breaking away from Android right now, but in the future it could. It may even consider challenging Google’s ownership and claiming the platform for itself. Much depends on whether Google and Samsung can continue to see the benefit in working together.