Is Samsung Unstoppable on Android Market?

With Samsung dominating sales, we ask ourselves whether Android is in danger of becoming a one horse race?

On the face of it, all is rosy in the Android garden.  According to analysts  Gartner, Android increased its  market share by almost 20 per cent  in the last quarter, compared to the  same period in 2011, to  122,480,000 units sold, capturing a worldwide market share of 72.4 per  cent. Market leader within the pack of attendant manufacturers is Samsung, selling almost 987 million devices in the same period to effect 22.9 per cent of the worldwide market, gaining the number one spot in the market share league table.

If you dig a little deeper into the fi gures, however, there are worrying concerns. To begin, Samsung also holds 40 per cent of the Android market with its nearest competitors taking around 10 per cent, while even on a national level, analysts uSwitch has five Android Samsung mobile phones occupying the top ten smartphone seller slots in the UK.

Check out the revenue streams from other Android manufacturers and it seems that, despite the general  Android success, the only company actually making money from the operating system is Samsung. Francisco Jeronimo, research manager for European mobile devices at IDC, confirmed that view:

“For the next couple of years it will be Samsung dominating growth, unless Google does something with Android and focuses more on Motorola. For the time being, I don’t see any other vendors with such strong investment and capacity to push Android. ”Does this translate to a problem lurking on the horizon? Is Samsung becoming too big for Android? More to the point, does Samsung’s dominance place Android under threat? Geoff Blaber, director of devices and platforms at CCS Insight argues Samsung’s dominance of Android could end up a problem if, for example, the Korean manufacturer’s attention moves elsewhere.

“Samsung accounts for around 40 per cent of Android’s volume. There’s a huge reliance on one player and if you take the S III out of the equation, Android is not as strong at the top end as Google would want it to be. Apple still dominates the premium market. Should Samsung start to switch allegiances, it would have serious implications for Android.” The relatively low revenue streams from Android has certainly pushed  HTC towards greater investment in the Windows Phone operating system alongside Nokia, while LG and now Sony have announced Windows phone developments – as has Samsung. This leaves Samsung in an odd situation. It is already a dominant player within the Android universe and, by licensing the free Android OS from Google, Samsung saves itself millions of dollars in software development costs and license fees but, then again, leaves itself dependent on Google. “It comes down to this sense of what it is Samsung wants to be,” said Tony Cripps, principal analyst at Ovum.

“Do they really want to be one of the power players or are they happy enabling someone else’s system?” The difference between it and the likes of HTC, for example, is that Samsung is not just a phone maker,  it does have, “the potential to create platforms which deliver content and web services to TVs, PC, phones and  media players and connect them,” said Caroline Gabriel, research director at Rethink Technology Research. This is Samsung’s competitive advantage, said Gabriel, as the world shifts more to web-based technologies like HTML5, which reduce the relevance of individual operating systems and platforms like Apple’s iOS and Android. Instead, applications will be more like webpages, which can run on any device. Samsung can draw on its extensive supply chain, manufacturing capability and research and development facilities to make this happen. For now, no one denies Samsung’s pre-eminence and it is believed that Samsung is more than happy to reap the Android benefits, but in five years’ time, it is conceivable that we may see Samsung picking up its ball and going it all alone.

And what happens if in the meantime the other main players decide their Android businesses are no longer viable, and decide to turn their attentions elsewhere? For Android competition is not only healthy, it’s essential to the future of the world’s most popular OS.