Which way is the wind blowing with Google's Android?
Published: Monday, April 1, 2013 at 6:01 a.m.
Last Modified: Friday, March 29, 2013 at 4:45 p.m.
A wildfire get its name because it lives and dies by how the wind blows. All it takes is a spark amid opportune elements for wildfires to grow at a supernatural rate. They also die just as quickly.
Google placed a well-timed spark with Android in 2008. iPhone was, by all measures, a tech tidal wave, but it was limited in those early years to AT&T users only. That left millions of hungry customers. Apple also kept its own operating system to itself, which left hardware makers foaming at the mouth to get in the game. In a genius stroke, Google borrowed a page from the Microsoft playbook by licensing its software and making money on the backs of each device being sold.
The rest is history. Android quickly became a five-alarm inferno.
Out of the gate came companies like Motorola, HTC, LG and later Samsung, which fanned the flames with various devices united by the same Android logo. The enormous amount of advertising and plethora of new devices was staggering, especially compared to the Apple. The kings of controlled burns had one device and held firm to the message that it was the best device.
Where has that wildfire burned during the past five years? The winds clearly have blown toward South Korea and Samsung headquarters. You see, Samsung pretty much owns Android. They ship 40 percent of the devices but made literally all the money. Competitor HTC made about 1 percent profit last year, and all the others either lost money or remained flat.
This is a dangerous trend for the Android wildfire because it is no longer wild. It is now concentrated to one place and could be in danger of being extinguished. How? All Samsung has to do is drop Google, develop its own operating system and Android will be relegated to the kind of cheap devices you buy from the drugstore.
How possible is this? The Wall Street Journal is reporting that Google held a secret meeting recently with Samsung to talk about such possibilities. The report says that Android chief Andy Rubin praised Samsung's success but also warned that further dominance could be perceived as a threat.
Samsung already layers a deep customization of its proprietary software inside Android on each device. Would it be that much more difficult to build a new system from the ground up? It would keep them from paying for a license on each device they sell. When you consider Samsung sold 215.8 million smartphones last year you can see why giving Google $10-$20 for each device might get a little old.
The elephant in the room is, of course, Apple. Isn't it always? You see Apple might not be the leading seller, but it makes the most money. Even though Android accounts for 70 percent of smartphone sales, Apple rakes in 70 percent of the profits.
One can't help but wonder if Samsung sees the value in the “controlled burn” approach Apple has established. Nobody wants to consistently finish in second place, and Samsung might just consider swapping out the Android engine for Windows 8 or a custom-built engine of its own.
Of course, these decisions don't come easy. If it ain't broke don't fix it might just be the Samsung direction. Still, we could be witnessing a perilous point in the history of Android. The software has epitomized the wildfire analogy, but, as we know, even the largest of fires eventually gets extinguished.
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