Is Samsung getting ready to divorce Google? The question has been asked ad nauseum in the tech media and the blogosphere, and everyone has their rationale and “evidence” for thinking it likely. With SlashGear reporting that Samsung and Google may be in early talks to deepen their TV partnership, this is as good a time as any to address this issue.
The answer isn’t the romantic and exciting corporate divorce some would like to see. Samsung isn’t divorcing Google. Samsung couldn’t divorce Google, and wouldn’t be wise to do so if they could. It’s true Samsung has layered some of their own software into Android, even at the expense of creating a sub-optimal experience of Google’s apps and services (giving S Voice integration and reducing Google Now to an app, for example). It’s also true Samsung has never committed to an Android-only strategy, as they also make Windows Phones and other competitors and have tried to develop their own platforms for years.
This has led some to speculate that Samsung might try to simply remove Google from the equation, the way that Amazon did. Amazon, however, is not Samsung. Amazon is a retailer of physical and digital goods, with an online portal millions visit daily, an established presence in eBooks, an expanding selection of additional content, and a strategy of running at razor thin margins on massive revenue.
The Kindle Fire is not meant to replace the ecosystem of apps and services available on iPads or in the Google Play Store, it’s a fiendishly good storefront for Amazon’s ecosystem, enticing the potential buyer with its low price, the fact their payment information is already registered with Amazon, the latest and greatest versions of Amazon’s apps with platform-exclusive features, and perks for Amazon Prime members.
For all of this, and while Amazon does not break out sales figures, the Kindle series of Android devices has a long way to go to compete with Apple or Google even in tablets, and is so far nowhere in smartphones, where a mobile ecosystem must be fully fleshed-out in a way Amazon’s isn’t (yet).
Today’s users need a Swiss-Army knife selection of apps that include social networks, maps, email, web browsers, photo editing, office suites, video editors, search, voice control, etc… Even after enjoying some success with the Amazon App Store for Android, which debuted in 2011, and now two generations into the Kindle Fire product, it remains rare to see the Amazon App Store promoted in third-party marketing.
Samsung is no closer, in fact they’re not even as close. For all the talk of Badas and Tizens none have ever emerged, nor have Samsung’s own “app stores” for Android taken off very well. What services has Samsung created yet that wowed anyone? S Voice, for example was a travesty compared even with Siri, and a joke compared with Google Voice Search on Android 4.1+ or Google Now. Not one Samsung service or software suite has become a household name yet even among their own users.
All of this could change, but Samsung’s adventures in building an ecosystem on Android haven’t exactly been a rousing success so far, at best they’ve slowed the upgrade cycle and hampered adoption of the more polished Google ecosystem and thus made both the Samsung and the Android brands less sticky, so that users would find it easier, not harder, to switch to another brand.
So then why even bother?
The Game of Leverage
Microsoft could tell you that a successful strategy for building an ecosystem with the help of multiple hardware partners is all about who has the most leverage. The OEM’s needed Microsoft and Microsoft needed the OEM’s, but once Windows took off and created a virtuous development cycle, Microsoft’s leverage became enormous.
Android differs because the core operating system is open source, and even the Play Store is very liberal for developers. This means Google has its work cut out trying to maintain leverage over their partners. Samsung, HTC, LG, Acer, Asus, Sony, any of them would dump Google in a second if there was more to be made by going alone.
They maintain leverage on the software and services side, first by making the best apps and services for Android, and then by licensing these through the Open Handset Alliance. The OHA is Google’s alliance with select hardware partners. Benefits of membership include early code access, the Nexus program, development support, legal support, and marketing support. The terms of the partnership requires members to install a set of core Google Apps like Search, Gmail, the Play Store, Maps, etc…, and to maintain app compatibility.
Samsung needs this ecosystem. Many of Apple’s apps and services are household names like iTunes, Garage Band, iCloud, Siri, and (although its name is the stuff of late night comedians) Apple Maps. And even Apple can’t really get by without Google’s services, some of which are baked into iOS, while others are very popular in the App Store
Samsung isn’t foolish enough to think they could abandon their partnership with Google right now anymore than Apple could. If they were tempted for a second, Google has a guaranteed partner in their Motorola Division for showcasing the best of Google (and three or four other big names at least who’d love to be the next Nexus partners). Not to mention that Chromebooks from Samsung are rocking it on Amazon, and the Google Glasses are coming, so Samsung has a lot of enticement to maintain a strong partnership.
However, Samsung is clearly determined not to remain a mere vendor, and their partnership with Google for Android is making both sides stronger. Every Google activation means one more person tied into the Google ecosystem. Samsung, meanwhile, is promoting an ecosystem that largely doesn’t compete with Google (for now). That is hasn’t really wowed yet is the reason they can’t yet claim their place alongside Apple, Google, Amazon, and Facebook as the “fifth horse” of consumer tech. Some day, they might.
But Samsung’s success as an Android vendor means they may soon be in a position to demand more revenue sharing from Google. The fact that Search is a cash cow for Google and a loss-leader for their next nearest competitor means they have more revenue to share and are more willing to negotiate favorable terms (and that even a weak threat like S Voice is still a compelling threat).
Google, partly in response to this threat to their leverage, has further polished its apps and services, innovated with products like Google Now, expanded the Nexus program to additional partners, and acquired Motorola, as well as making it clear that “forking” will not be tolerated from partners. Bringing the Android and Chrome divisions together may be a similar defense posture, another part of Google’s ongoing strategy to build a moat around their core ecosystem.
If Google succeeds then LG, ASUS, and Motorola at least can provide strong competition for Samsung in smartphones and tablets. If Samsung succeeds, Google will have to make further concessions on revenue sharing, and we may then see Samsung scale back some costly efforts to undermine Google’s services with their own. A third scenario would have them meet somewhere in the middle.
Divorce, however, is not on the table. The imagined rift between the two is just that, imagined. There’s little doubt Google and Samsung collaborated in ways we aren’t fully aware on the development of the most recent Galaxy flagships including the S4, and while we can’t know what decisions were made behind the scenes regarding how Samsung would implement their own finishing touches, we can be sure that each side was excited to work together to make a great device, and were pleased with the end result.