Will Google's Partners Abandon Android in 2014?

Many of Google's hardware partners, including Samsung, Sony, and LG could turn to rival mobile operating systems in 2013.

Jan 7, 2014 at 12:00PM

Google's (NASDAQ:GOOGL) Android has been nothing short of a tremendous success: The open-source, mobile operating system has grown rapidly, taking a commanding share of the smartphone and tablet market.

But this year could be difficult for Google's mobile operating system. Many of Google's hardware partners, including Sony (NYSE:SNE), LG, and Samsung (NASDAQOTH:SSNLF), continue to toy with alternatives -- making it possible that Google could see some defections in 2014.

Will Sony join forces with Microsoft?
Sony strongly embraced Google's Android in 2013, releasing a number of high-end smartphones and tablets. Sony's Xperia Z was the first water-resistant Android smartphone, while the Xperia tablet Z was the first full-sized water-resistant tablet. Sony rolled out an Android-powered smartwatch last fall, and its phablet, the Xperia Z Ultra, got a special Google Play edition release in December.

But despite warming up to Google, it's possible that Sony could consider jumping ship. Last week, The Information reported that Sony has been in talks with Microsoft about releasing a Windows Phone in 2014. According to the report, Microsoft could offer Sony a deal on Windows Phone licensing fees, making Microsoft's mobile operating system as equally attractive as Google's Android.

That report was corroborated by Digitimes on Monday -- the publication said Sony has two Windows Phone models in the works, though it continues to focus its efforts on Google's Android for now.

LG resurrects webOS
Like Sony, LG has focused its mobile efforts on Google's mobile operating system, releasing a series of Android-powered smartphones and tablets in recent quarters. LG's G2 is widely considered to be one of the best Android handsets on the market, while its 8-inch G Pad tablet was, like Sony's phablet, given the Google Play edition makeover.

But when it comes to TVs, LG is heading in another direction: At CES on Monday, LG rolled out a series of smart TVs powered by webOS, a long-forgotten Android competitor. Palm developed webOS as an alternative mobile operating system, but after acquiring Palm, Hewlett-Packard threw in the towel and sold the technology to LG. Perhaps LG will find more success with webOS than HP.

Samsung keeps Tizen alive
Although LG and Sony have seen some success with Android devices in recent quarters, Samsung remains the dominant Android OEM. According to Localytics, about two-thirds of all Android smartphones in existence were manufactured by Samsung.

But although Samsung dominates Android hardware -- and does so quite profitably, generating billions from its Android-powered Galaxy devices -- it continues to keep Tizen, its rival mobile operating system, alive.

Last year, Samsung ran a contest aiming to boost Tizen support among the developer community -- cash prizes for quality Tizen apps, totaling $4 million. Samsung has also said that it's working on Tizen-powered smartphones, the first of which could be released in 2014.

Will HTC be forced out?
Beyond Sony, LG, and Samsung's flirting with rival mobile operating systems, there are other potential concerns in terms of the number of companies making Android devices. HTC, a longtime Google ally, looks to be on the brink of financial ruin -- HTC reported yet another disastrous quarter on Monday, as its share of the smartphone market continues to dwindle.

HTC continues to make Windows Phones, and like Sony, has reportedly been in talks with Microsoft about an expanded deal. Yet, HTC's financial problems could be more detrimental -- with its market share slipping, market cap plunging, and the company operating in the red, it's possible HTC might not even survive, at least not in its present state, for much longer.

From allies to competitors?
With about 81% of the smartphone market and the majority of the tablet market, Google's Android is far from threatened. Yet, outside of its unprofitable Motorola division, Google remains largely dependent on its hardware partners.

Samsung, LG, and Sony's willingness to support other mobile operating systems, then, is somewhat troubling. While all three companies, alongside HTC, will likely continue to produce Android devices in 2014, the possibility that one or two of them could eventually jump ship continues to loom large.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google. It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Jun 12, 2015 at 5:01PM

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