Depending on who you ask, the reason people love the Samsung Galaxy S4 is because it features the power of Google Inc (NASDAQ:GOOG)‘s Android OS; or the one factor holding Samsung back is the fact that it features an undifferentiated OS like Android. As the manufacturer of the single best selling line of Android devices, Samsung is positioning itself to have an increasingly persuasive voice with Google. This is even more notable when you consider that at the recent release party that Samsung threw for the Galaxy S4, Android was not mentioned.
Ecosystems are the new driving force
While there has always been an inexorable connection between software and hardware, Apple Inc. (NASDAQ:AAPL) has created and executed the current paradigm for consumer electronics with its iOS ecosystem. Going back to the 2012 Consumer Electronics Show, CNET’s Matthew Moskovciak wrote:
The “ecosystem” concept started bubbling up last year at CES. Back then, companies like Samsung and Vizio were talking about creating tablets that talked to their TVs and app stores that could integrate their mobile devices into the entire living room full of devices. Apple Inc. (NASDAQ:AAPL) is the model, of course, having already closed the loop on what Steve Jobs originally dubbed the “digital hub” back in 2001.
Apple Inc. (NASDAQ:AAPL) created the model that everyone else is chasing, and it defines some of the critical battle lines between Samsung and Google Inc (NASDAQ:GOOG).
Similar to Apple Inc. (NASDAQ:AAPL)’s iOS ecosystem, Google’s Android is well established. The Samsung foray into this space is less developed, but is growing rapidly. Specifically designed Samsung Apps allow users to manage their media files between various Samsung devices, and, while they can be accessed by other Samsung devices, they are not accessible on other Android devices . As the company describes it: “The Samsung Media Hub app brings all-star entertainment to the Galaxy S smartphones and the Galaxy Tab. The app is preloaded on your device so you can instantly enjoy a diverse selection of movies and TV shows that start playing while they download.”
Samsung has been slowly testing the waters, including the Media Hub on devices to get users accustomed to using multiple platforms with their devices. This has given the company an unusual ability to work inside an already established ecosystem. These closed environments are extremely difficult to break into — unless you are invited in through the front door. So the seeds of a frenemy-ship are sown.
A new operating system
Samsung recently announced that by August it may release a new smartphone that works on its open source operating system called Tizen. The premium device planned for release at the end of the summer will give developers even more control in writing software to utilize the new platform. It is the result of a collaboration of several hardware manufacturers including Huawei Technologies, China’s largest manufacturer of telecommunications equipment.
Many see the move by Samsung as a direct response to Google Inc (NASDAQ:GOOG)’s purchase of Motorola Mobility for $12 billion. This move was viewed as a precautionary response to the nearly 40% market share achieved by Samsung devices, making it the largest manufacturer of Android products by a significant margin. 96% of Samsung’s sales come from Android-based devices, meaning that the Tizen response is a safety measure taken to protect against a safety measure. This is how true frenemies distrustfully work together.
Even Samsung, however, realizes that the move is a risk that could sour the relationship. If Google Inc (NASDAQ:GOOG) becomes the single dominate player in the market place — think Mr. Softy and Windows — the less-than-friendly move might sting Samsung in the end. Even with Android gobbling up market share, it is hard to imagine a world where iOS loses relevance. As long as consumers are willing to accept multiple OS alternatives, the move seems a sensible one by the South Korean firm.
Shifting loyalties
As we have seen from huge patent cases between technology firms with ongoing supplier relationships, many companies in the space openly fight with one another and simultaneously relying on each other’s products. Battle lines between operating system, ecosystems, and hardware make Samsung and Google Inc (NASDAQ:GOOG) very probable frenemies that, at least for now, are much better as a team in the smartphone and tablet spaces than they are on their own. Each have independent business lines that make them formidable opponents, but as these titans dance with each other for dominant position, both remain strong in the industry.
The article Will Google and Samsung End Up Frenemies? originally appeared on Fool.com.
Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Intel. The Motley Fool owns shares of Apple, Google, and Intel.
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