Samsung Considers HP JV, As Concern Mounts Over Android

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Samsung is reconsidering Android, with some observers claiming that the company is currently evaluating other options including the strength of their Bada OS offering and the possibility of bidding for HP’s PC and Palm businesses.On Friday Samsung chairman Lee Kun-hee convened a meeting of top executives to discuss the recent $12.5 Billion dollar acquisition of Motorola Mobility by Google.

Privately senior Samsung executives have said that they are concerned about the Google Motorola deal as the Company has invested heavily in Android across both their Smartphones and Tablet offerings.

Currently running second to Apple in the Smartphone market Samsung management are concerned that they are “exposed” and that their mobile future is in the hands of Google which observers say is a risk.

Fortune Magazine said that the Google-Motorola deal makes Google a competitor to Samsung, rather than the partner that it once was.

They went on to say that Google is the market leader in the smartphone operating system market with Samsung as the largest player in the Android ecosystem. With the help of Android software, Google mainly makes money through mobile advertising revenues as Google is the default search engine on Android smartphones.

As search advertising accounts for nearly 70% of our $596 price estimate for Google stock, any change in Google’s market share expectations could have adverse implications to its stock value as can be seen from the above chart. Our price estimate for Google stock is about 10% above market price.

Lee realises that Samsung is not controlling its own destiny via their relationship with Google, which is why he has ordered wireless chief Shin Jong-kyun to diversify the company’s portfolio of wireless devices. He has also ordered the immediate expansion of the Companies Bada platform South Korean daily Dong-a Ilbo.

ChannelNews has also been told that the company is currently evaluating the concept of a joint venture with Hewlett Packard, as they consider taking over the company’s PC business and the WebOS business.

Currently Samsung is trying to grow their PC business worldwide and a joint relationship with HP, similar to what Lenovo has with IBM, could work well for both companies observers claim.

Another option for Samsung is to accelerate the marketing of the Microsoft Windows Phone and Microsoft’s new Mango OS. The move if initiated could be a blow to Nokia who are banking on a lack of interest in the Microsoft offering by big brands to revitalise their Smartphone business.

Financial analyst firm Trefis said last week “We believe that the changing dynamics in the smartphone industry is forcing Samsung to develop and innovate on its own Bada operating system”.

Analysts claim that changes in support for the Google OS could result in less Android devices hitting the market in the wake of the Google Motorola deal, especially if Samsung’s position is followed by other Android Smartphone manufacturers.

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