A Broadway-style show was a clever way for Samsung Electronics to launch its latest smartphone, the Galaxy S4. But the event was notable as much for what wasn't mentioned, Google, as for what was.
The packed house at New York's Radio City Music Hall (capacity 6,000) was rewarded for showing up. The performance was entertaining, poking fun at the spectacle that smartphone launches have become, while successfully demonstrating key features of the new device. As Steve Jobs showed, slick presentations are important to drive momentum. And, considering that smartphones are harder to distinguish these days, brand-building may be taking on added importance.
That lesson isn't lost on Samsung. It clearly wants to blaze a more independent trail from Google, maker of the Android operating system that powers Samsung's line of popular smartphones. The search company was hardly mentioned in the presentation.
Though the latest version of Android is available on the S4, Samsung didn't emphasize the point. Key Google services like Google Maps and Google Now, a new smart assistant for answering questions, weren't discussed. The huge library of apps available via the Google Play Store, a key foundation of Android's popularity, wasn't brought up.
Instead, Samsung emphasized its own smartphone services, like a feature called S Translator that provides text-to-voice and voice-to-text translation in nine languages.
The Korean conglomerate actually has more momentum in terms of smartphone market share than any other device maker, including Apple. Samsung commanded 31% of the global smartphone market in 2012, according to Strategy Analytics, compared with 20% for Apple. In 2011, they both had roughly a 20% share.
The Android ecosystem is similar to the PC ecosystem. Like Microsoft, Google provides an operating system that hardware makers install on their devices. But Microsoft doesn't have a hardware partner with such a big market share. Samsung is seven times as large as the collection of second-tier Android handset makers that have about 3% to 5% share each. Only a few points of market share separate Hewlett-Packard from Lenovo Group from Dell in PCs.
The risk to Google is clear. Samsung could "fork" Android, developing its own flavor of the open-source operating system that may not rely as much on Google services like search and maps. Amazon did something similar with the Android-powered Kindle Fire. Samsung is even working on its own mobile operating system, Tizen, which it plans to ship in devices later this year.
Samsung can't break away from Google any time soon. After all, a large selection of apps is vital for smartphone market share these days. But Samsung is smart to add its own software to devices, in order to avoid its hardware becoming commoditized like PC makers'.
In the same way, you can understand why software-focused Google has started to roll out its own smartphones, both its own designs and via its Motorola subsidiary. Considering the volatility that is typical of the cellphone market, demonstrated by the waning fortunes of yesterday's dominant brands Nokia and BlackBerry, it pays to hedge your bets.
Rolfe Winkler
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