Monopoly: Samsung bagged 95% of all Android profits in Q1

In a world crowded by so many mobile device manufacturers, you’d think that the profit pie would be shared somewhat proportionally between participants. That's not the case however. A recent reports shows  that, in the first quarter of 2013, Samsung managed to bag around 95 percent of all profits made on Android.

The figure may be unbelievable to some, but taking in consideration that, during the same period of the last year, Samsung accounted for 90 percent of all smartphone profits, this is merely an incremental increase.

But how does a company as Samsung manage to crush its competition so badly?

There is no competitor

The Seoul-based company sells many expensive, high-margin products, such as the Galaxy S4, the Galaxy Note 2, or the Galaxy Camera, but it seems that people opt for quality and tend to remain loyal to a prestigious brand. In addition to the top liners, Samsung carpet-bombs the market with a device for every taste and budget.

Some other contributing factors are Samsung’s impressive manufacturing capability, which allows it tokeep building costs to a minimum, the massive and well executed marketing campaigns, and the excellent relationships that the Koreans have with carriers from all over the world.

But an equally important contributor to Samsung’s monopolization of the Android profits is the strategy adopted by the competition. While HTC tried to basically follow the same path by releasing attractive and pricy smartphones like the One, some other manufacturers prefer to go at a loss, in an attempt to build market presence and mind share.

For instance, LG partnering with Google to sell a fantastic phone at an amazing price has not done wonders for the balance sheet, but it succeeded in gave some much needed sheen to LG’s name. Still, with a phone that good, and with some other impressive devices created in-house, LG took home a mere 3% of the global Android profit share in the first quarter of the year.

In pure numbers, the total operating profit of the smartphone industry for Q1 2013 was estimated to reach $5.3 billion, from which Samsung claimed $5.1 billion. LG’s strategy has gained the company a little over $100 million, while the remaining was split between several other manufacturers.

Samsung’s power over Android has been demonstrated time and again, but the future may bring it even more clout and financial domination. Even Google chose to exclusively sell an unlocked version of the Galaxy S4 online after partnering twice with Samsung for older Nexus generations, which is a trust no other company has ever gained. And maybe this trust will bring more perks for Samsung, like early access to Android updates, which should give the company another advantage against its competitors.

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Google: Android activations to total 900 million this year

Google expects users to activate about 900 million Android devices this year, more than doubling the number activated in 2012, an executive said Wednesday.

Sundar Pichai, head of Google's Android and Chrome operations, said at the company's developers conference that users activated 400 million Android devices in 2012 and 100 million in 2011.

"The momentum has been breathtaking since then," Pichai said.

And Hugo Barra, vice president of product management, said Google Play has just passed 48 billion app installations, with 2.5 billion installations in the last month alone.

Google is hosting Google I/O, its annual developers conference, Wednesday in San Francisco. The online giant has been expected to announce a host of new products and provide more details about other recently announced technology such as Google Glass.

Google's Android software has become the most-used mobile operating system in the world. Canalys last week said Android ran about 60 percent of all smart devices -- phones, tablets, and notebooks -- shipped in the first quarter, while iOS came in second with 19 percent share. While Android still lags iOS in tablets, it's starting to pick up steam, much as it did before dominating smartphones.

Google Executive Chairman Eric Schmidt in April predicted that 1 billion people will be using Android smartphones within the next six to nine months. He also said there will be nearly 2 billion Android phones within a year or two. As of April, there were more than 750 million Android phones in use across 320 carriers and 160 countries, Schmidt said, and there are 1.5 million sales or activations of Android every day.

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Android 5.0 notebooks, a Google 

smartwatch, and an Apple TV

 competitor coming our way?

Whilst the new Nexus 7 may have been the big news from KGI Securities analyst Ming-Chi Kuo yesterday, he has also released some information, or shall I call it speculation, about some other future Google projects today.

There’s mention of an Apple TV competitor and a Google smartwatch, which we’ll delve into in a minute, and, perhaps most interestingly, some rumors regarding notebooks and Android 5.0.

Of course, Google already has Chrome OSfighting in the laptop corner, but with the operating system struggling to gain mainstream appeal and an OS merger now out of the picture, you can understand why Google may be interested in trying out Android on more traditional computers.

However, Kuo doesn’t believe that we’ll see any of these products at Google I/O this year, and states that Google probably won’t be the first to market with an Android-powered notebook.

Sounds like logical reasoning. As we know that Android is making a move into the notebook space,Intel already told us as much, you can bet that Samsung, and other manufacturers, will want to put products to the market as early as possible. But as Android 4.x isn’t really optimised for laptops, the user experience could be a little lacklustre. Which is perhaps where the next major version of Android comes in?

Kuo gives a major hint that Android 5.0 (Key Lime Pie?) could be, at least in part, orientated around improving a laptop/notebook experience, but that we won’t be seeing any Google products in this category until these features are ready.

Targeted at notebooks? Is Android about to pull a reversal on us and move away from a touch input focus? It’s an interesting statement to say the least, but remember that Jelly Bean added features like multi-user support specifically to tablets, so there's no reason why the next version of Android couldn’t add some sideline features for notebook users.

Moving on, we’ve all been hearing about Google’s rival to Apple TV for a while, so is the service about to step it up a notch?

Kuo suggests that whilst an Apple TV-like competitor is still on the way, hardware changes have been causing delays which means that it probably won’t be appearing at Google I/O either. Supposedly, Google has decided to change from a Nvidia Tegra-powered chipset to Texas Instrument’s OMAP, which I presume means that a pretty big redesign has taken place.

Finally, how about a Google smartwatch? Again there’s been plenty of speculation floating around about this particular product as well, and surprise surprise, according to Kuo we won’t be seeing a Google smartwatch for a while yet either. Apparently the smartwatch won’t go into mass production until next year, and could be launched to accompany other wearable technologies like Google Glass.

So did Kuo actually tell us anything of worth here? Well yes and no. These are still rumors, and since none of these products are set for release we won’t be able to confirm or deny their existence any time soon. On the other hand, if true, these rumors give us an interesting insight into what Google has planned for the future. Directly taking on Microsoft and Apple in the laptop space with Android would be a bold move by Google, but the timing seems right when you look at the poor sales of Windows 8.

I suppose the real important question is will consumers actually be interested in any of these products? Would you buy an Android-based laptop, a smartwatch, or Google TV box?

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