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Will Google's Partners Abandon Android in 2014?

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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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Read/Post Comments (9) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 07, 2014, at 9:16 PM, frellmedead wrote:

    HTC could have had the same kind of hit it had with the original Incredible, but they decided to make the Incredible 4G with unimpressive specs. Looks like I have bought my last HTC phone.

  • Report this Comment On January 08, 2014, at 2:06 AM, wfrmsf wrote:

    It has been bound to happen. Android is the dump operating compared to iOS and Windows mobile. Major manufacturers like Sony, LG, and Samsung do have the potential to use their functions at it's fullest.

  • Report this Comment On January 08, 2014, at 2:56 AM, at1988 wrote:

    this article, its just sad. Are you completely oblivious to Android's rising market share, staggering developer edge over Windows Phone, LG's increasing flurry of Android releases, and Microsoft's disarray? Its Google, not Microsoft, making a deal with one of America's largest carriers.

    If anything, this is all just posturing. No one, not in politics, not in business, wants to be taken for granted. This is akin to saying that Nokia's recent Android concept meant it was 2 steps away from joining Google and ditching Windows. or that Samsung is ditching Android, even tho it just announced 4 major Android tablets a few days ago, set to be released soon.

    Apple fanboyism at its worst. Amazing how the dumb money manages to grab so many headlines.

  • Report this Comment On January 08, 2014, at 3:59 AM, drjekelmrhyde1 wrote:

    Firefox and Ubuntu mobile OS's can tear the early adopters away from Android. To the poster earlier, those Nokia handsets were ASHA phones

  • Report this Comment On January 08, 2014, at 4:05 AM, drjekelmrhyde1 wrote:

    I also find it funny the Android users turned their back on HTC(go to Android central and read anything about HTC), when HTC made the first Android phone. On top of that Samsung had to admit in court that it was hiring paid college kids to post negative stuff about HTC in forums.

  • Report this Comment On January 08, 2014, at 7:31 AM, AcuraT wrote:

    I looked at HTC and considered their phones. Unfortunately, they were not as good as the comparitive Nokia phones I looked at. No built in GPS chip for example, which runs the battery down faster if you want to use GPS functionality. Lack of functionality for those who inspect those details deter users like me from buying them. Too bad, they are otherwise decent phones.

  • Report this Comment On January 08, 2014, at 9:04 AM, vernr75 wrote:

    None of that makes any sense. Selling an alternative mobile OS doesn't guarantee any more success than selling Android. Just look at the Windows Phone saga. Samsung, the world's leading smartphone maker, has been selling Windows Phone for some time now but they've had no success at it despite massive success and rising brand recognition via their Android devices. That's because most of the people who buy Windows Phones are doing so because they specifically like Nokia hardware. That's why not even Samsung can sell Windows Phones, whereas Nokia is only getting sales of its Windows Phones where the Nokia brand has always been very popular...while it continues to struggle everywhere else.

    Even if Samsung comes out with Tizen models eventually, they're going to struggle to find markets for them just as they've struggled with Windows Phone. Carriers, especially those in developing markets, aren't going to choose to stock Tizen phones just because they're made by Samsung. They don't have money to waste on products they can't market. The Android name has now become a marketing tool in most regions that will be driving the bulk of smartphone sales long into the future. That's precisely why so many of these carriers can purchase, market and then successfully sell Android devices made by companies that most people have never heard of.

  • Report this Comment On January 08, 2014, at 11:24 AM, uncoveror wrote:

    The last thing that the tablet and smart phone market needs is the waters muddied. Already, Android is not just Android, and you need to do a lot of homework before buying if there is a specific app you want to run like Paypal Here. The cheapo phones can't run it.

    If instead of just iOS and Android there are a dozen other operating systems all running proprietary apps, then a lot of shoppers will throw up our hands, and stick to dumb phones.

    We need standardization, not something like the quixotic quest to find a version of Linux that works well enough on a desktop PC to replace windows. With thousands of versions made by countless undirected tinkerers, that will never happen.

  • Report this Comment On January 11, 2014, at 3:51 AM, mw3051 wrote:

    no, they will not abandon android.

    it is a cash cow.

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Sam Mattera

Sam has a love of all things finance. He writes about tech stocks and consumer goods.

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