Google Recognizes Growing Samsung Threat

by Matt Klassen on February 27, 2013

There’s an interesting symbiotic relationship that exists between Google and its bevy of Android partners. The partners get free access to the world’s most popular mobile operating system and they get to customize it mostly the way they want, while in return Google gets the mobile ad revenue generated through Android device usage. But what happens when one of the partners realizes they might be able to do Google’s job as good as Google does? Well, then we have trouble in paradise.

It’s a situation Google hoped would never arise, one of its Android partners achieving true market success with the search engine giant’s free, open source operating system. While Samsung’s success with Android stands as a benchmark for all of Google’s partners, I would wager a guess Google isn’t terribly excited about anyone else following suite, given that Samsung’s dominance has added some unwelcome tension to their partnership.

In fact, according to the Wall Street Journal, Google executives are starting to fret over what the future might hold for the Google/Samsung relationship, with some speculating that as Samsung continues its dominance it may soon be able to start calling the shots. Of course the bigger story would have been if any of this actually caught Google unawares.

Come on Samsung, weren’t we happy together? Weren’t things working out great for both of us? It’s the plea of the changing relationship, the last ditch effort to maintain the status quo, and as with every other time it’s been used, it’s unlikely to work here. As I’ve said time and again, the last thing Google has ever wanted for its Android ecosystem is unbridled success, knowing that should any one partner actually make anything out of Android, this whole free open source Android fantasy would come crashing down around its ears.

While Google has always known a symbiotic relationship exists between it and its partners, the search engine giant has always been comfortable knowing that it remains firmly in charge, its entire partnership base totally and utterly dependant on Android for any and all success in the mobile market. But now with Samsung emerging as a market leader, the Korean company has shifted the balance of power and Google now finds itself uncomfortably dependant on Samsung to provide continued mobile ad revenue.

Now, as the Wall Street Journal explains, “Google executives worry that Samsung has become so big—the South Korean company sells about 40% of the gadgets that use Google’s Android software—that it could flex its muscle to renegotiate their arrangement and eat into Google’s lucrative mobile-ad business.”

In an effort to keep Samsung’s Android dominance in check, Google has reportedly started meeting with other Android partners, challenging the likes of HTC and newcomer HP to produce devices that could lessen the leverage Samsung currently has.

Of course when there’s trouble in paradise it won’t be long before someone falls from grace, a modern day Lucifer banished forever from glory, and in this scenario that role will eventually be played by Samsung, one more reason the Korean company is hedging its own bets by developing the Tizen OS.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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