Thanks to Google Inc (NASDAQ:GOOG) Android, Samsung has climbed to become the largest smartphone vendor in the world by market share. The open-source platform has proved critical to the South Korean company’s success in recent years, which has also greatly benefited the search giant, too.
Surprisingly, this partnership is just waiting to go sour, because ultimately Samsung and Google’s interests aren’t entirely aligned, even though the pair are still on their honeymoon.
Conflict of interests
Samsung’s goal in life is to sell hardware, and to it, Android is merely a means to an end. On the other hand, Google Inc (NASDAQ:GOOG) just wants more people on the Internet using its services and seeing its ads.
Over the years, Samsung has had countless software partners, and Google is just its latest flame. Samsung’s rise to power presents a unique threat to Android and Google, one that Google has already taken note of. If the company wrangles even more sway in the Android ecosystem, it could leverage higher ad-sharing agreements or other bargaining chips at Big G’s expense. Now-former Android chief Andy Rubin had internally voiced concerns over this distinct possibility.
In the extreme, Samsung could entirely fork Android for its own benefit, much like Amazon.com, Inc. (NASDAQ:AMZN) has done with the Kindle Fire family or what most Chinese smartphone OEMs are wont to do. To be clear, Samsung would greatly benefit from a forked version of Android, because it would be an important point of differentiation from other Android OEMs — much more potent than the current practice of customized interfaces like TouchWiz.
The main thing stopping Samsung from doing this right now is that it lacks the content and services that Google Inc (NASDAQ:GOOG) brings to the table. This is precisely how Amazon.com, Inc. (NASDAQ:AMZN) was able to fork Android very successfully, because it has plenty of content and services, and even has its own Android Appstore.
During Samsung’s Galaxy S4 unveiling Thursday night, though, it was very apparent that the company is trying to undermine Android.
Slowly cutting Android out
There’s no avoiding the fact that the Galaxy S4 is an Android device. However, what Samsung can and did do last night is highlight all of its new apps, services, and software features, while decidedly not emphasizing Google Inc (NASDAQ:GOOG)’s popular services.
Instead of talking about Google Play and all the types of content available from the search giant’s repository, it showed off Samsung Hub, an integrated storefront for digital content like music, videos, books, games, and more. The new S Translator is exactly what it sounds like, and can potentially replace Google Translate. Forget Google Now and spoken turn-by-turn directions in Google Maps, that’s what the new Galaxy S Voice Drive is for.
That’s not to say that Google Inc (NASDAQ:GOOG)’s services are gone, just that Samsung is clearly pushing its own instead. These are just some of many examples where Samsung is actively replicating Google offerings (sound familiar?), and are the first signs that Samsung isn’t exactly happy with the status quo and wants more control of the customer relationship and experience than it currently has.
At this rate, Samsung will eventually be able to strip Android to little more than the bare bones for its operating system platform, while it loads up its own features, services, and content on top. Google will always have search, but that’s just one aspect of its broader Android strategy; Big G’s other services are also crucial to its moat-building goals.
Perhaps a trial separation is in order
In addition, Samsung is legitimately trying to add entirely new features to Android for further differentiation, such as its Air View and Smart Scroll features. These are relatively new and don’t seem to work as well in practice as they do in theory, judging by early hands-on reviews.
Samsung is also actively targeting enterprise customers with its new Knox security certification. The South Korean company is positioning Galaxy devices with Knox within its broader Samsung For Enterprise, or SAFE, initiative. That puts it in the same enterprise market with Apple Inc. (NASDAQ:AAPL) and Research In Motion Ltd (NASDAQ:BBRY), while leaving the rest of the Android army behind. Samsung now characterizes its own Galaxy Nexus, “all other Google Nexus,” and “all other Android tablets and phones” as “not safe for work” (emphasis mine).
Put it all together and what you get is an increasingly tense relationship between the largest smartphone OEM by volume and the provider of the dominant mobile operating system that powers all those devices. Loveless marriages simply aren’t built to last.
The article How Samsung Is Undermining Android originally appeared on Fool.com and is written by Evan Niu, CFA.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, and Google.
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