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It's Official: Samsung Owns Android

Thursday - 5/16/2013, 8:00am  ET

If you thought Google owned Android, you were wrong. Well, technically the search giant still develops and maintains the operating system before letting it run free, and only directly benefits from a subset of the broader Android army when considering how many distinct forks there are.

On the hardware front, Samsung really does run the show. Strategy Analytics has released an estimate that the South Korean giant gobbled up 94.7% of all operating profits within the Android ecosystem in the first quarter. That leaves just a sliver for other OEMs to divvy up among themselves, and some vendors just aren't hacking it.

For instance, Google's own Motorola subsidiary generated an operating loss of $271 million during the first quarter. Taiwanese vendor HTC just reported that its profits plunged by 98% to just $2.9 million in the first quarter, which was caused in part to delays launching its new One flagship. Chinese vendors like Huawei and ZTE are now showing up on the radar, but those rising unit volumes are mostly in the low-end and low-margin Chinese smartphone market.

Fellow South Korean conglomerate LG is also on the rise, and is even using Samsung's own tactics of imitation against it. LG has replicated some of Samsung's features in its newest phones, much like how Samsung copied Apple. To LG's credit, the company is a distant second in Android profit share, grabbing all of 2.5% of operating profits.

Strategy Analytics estimates that the smartphone industry generated a total of $12.5 billion in operating profits in the first quarter. Android comprised 43%, or $5.3 billion, of that total. Outside of iOS and Android, Nokia's smartphone business generated an operating loss of $54 million, while BlackBerry posted $12 million in operating red ink. Those respective turnarounds may be starting to potentially take shape, but operating profits are still elusive.

With that in mind, it's safe to say that Apple enjoyed approximately $7.2 billion in iPhone operating profits during the quarter. That would be the majority of the total $12.6 billion operating income that Apple just posted.

Like it or not, Samsung is taking over Android. To that end, Strategy Analytics thinks that Samsung enjoys greater revenue and profit from Android than Google does. That hasn't necessarily been detrimental to Google in any way, as its services and ads are still featured on Galaxy devices, which is all Big G really cares about anyway when it comes to Android proliferation. But Samsung has made it clear that it wants to compete in software and services, which could hint at further undermining Google's presence.

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This article was originally published as It's Official: Samsung Owns Androidon Fool.com

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