Who wears the pants in the Android family, Google or Samsung?

We all tend to forget that Android is nothing more than just another mobile operating system. Is there something special about the OS that has propelled it to the pole position that it now enjoys? IDC says 75% of all the smartphones shipped during the third quarter of this year were powered by Android. That number isn’t an accident. Horace Dediu, an analyst who is known for keeping his eye on not only Apple, but the mobile industry in general, made a keen observation yesterday.

He said that in Q1 2010, when Samsung started taking Android seriously and launched the first generation Galaxy S, just 3% of the mobile phones they sold during the quarter were smartphones. Today that number is 54%. In terms of actual units, IDC estimates that Samsung shipped 56.3 million smartphones in the latest quarter. Assuming that number is accurate, and assuming they’re also correct with their figure of 136 million Android smartphones being sold in Q3, that means Samsung made 4 out of every 10 handsets powered by Google’s software during the quarter.
Dediu focuses on Samsung because along with being the dominant Android handset maker, they’re also the only company in the mobile industry, other than Apple, that’s making serious money. HTC’s margins are barely break even, and everyone else is bleeding.
So again, why is this the case? There are many theories, but here’s what we believe: Samsung is in the unique position of manufacturing many of the components that they use in their consumer facing products. Yes, Samsung sells their components to other handset makers, but the bulk of what they output goes into their devices. The only other company that can claim to be even remotely in the same situation, in terms of controlling their own supply chain, is LG.
It’s a tough pill to swallow, but without Samsung backing Android, something you could say they did by sheer accident, we’re pretty sure that the OS wouldn’t be where it is today. And that brings up a really important question: Who controls Android’s destiny? Is it Google or is it Samsung?

SOURCES Asymco

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