Together, Google Inc (NASDAQ:GOOG) and Samsung have been able to bite into Apple Inc. (NASDAQ:AAPL)’s share of the mobile market. Despite the fact that Google and Samsung have had a good working relationship in the past, it is interesting to note that things may not continue down this road in the future.
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According to a report by The Wall Street Journal, the search engine giant may be worried that Samsung has become too big. So big, in fact, that it could use this power to “to renegotiate their arrangement and eat into Google's lucrative mobile-ad business.”
At this time, Samsung sells approximately 40 percent of devices that use the Google Android operating system. While his may be less than half, it is easy to see that there is a strong partnership here.
The same Wall Street Journal article goes on to add some information as to how Google Inc (NASDAQ:GOOG) is attempting to “keep Samsung's leverage in check.”
“Now, as top executives from the world's mobile industry gather in Barcelona, Google is meeting with other companies in hopes that their Android devices can keep Samsung's leverage in check by providing legitimate competition, the people said. The Internet-search company is hoping new Android devices from manufacturers such as HTC Corp.”
In the past, Google executives have discussed the company’s relationship with Samsung as well as the mutually beneficial partnership. That being said, they are well aware that too much power given to Samsung could be a bad thing.
Here is some information from the Wall Street Journal, discussing what Android head Andy Rubin is thinking:
“But Mr. Rubin also said Samsung could become a threat if it gains more ground among mobile-device makers that use Android, the person said. Mr. Rubin said Google's recent acquisition of Motorola Mobility, which makes Android-based smartphones and tablets, served as a kind of insurance policy against a manufacturer such as Samsung gaining too much power over Android, the person said.”
It will be interesting to see how things progress in the future. Google Inc (NASDAQ:GOOG) is in a very difficult spot, as the company relies heavily on Samsung but doesn’t want to hand over too much power.
DISCLOSURE: I have no positions in any stock mentioned.
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