I knew it was going to come this sooner or later, and in fact, I am surprised it took this long. According to the The Geek, Google (GOOG, GOOGL) has changed its Mobile Services agreement for Android phones. Google now requires that the Android logo must show up during the boot process on all new Android phones. If not, those devices will not be allowed to access the Google Play app store.
That's right folks, Google is basically reclaiming its Android franchise, trying to put an end to the different forked versions out there. And guess what, this is only the first step. And manufacturers who don't comply with its wishes will either have to make their own app store, or use some other app store. The reason why this tactic will work is simple: If I were an Android user (which I am), I would only buy a device that had access to Google's app store and would settle for nothing less.
It's not so much that Google feels threatened (as it did several months ago), but rather, this is a policy on the back of Google's secret deal with Samsung (OTC:SSNLF) several months ago [please consider: Google Concedes Defeat and Google Concedes Defeat, Who Wins Who Loses (Part II)].
Let me remind you what this secret deal was (according to me) and why it has a lot to do with the change in Google's Mobile Services agreement. Google (I believe) made a secret deal with Samsung, in order for Samsung not to pursue forking out its own version of Android and stop entertaining the idea of using some other OS like Tizen (as I have said in the past, Samsung eventually was going to go this route).
In exchange for Samsung sticking with Google's version of Android, Google would stop trying to become a device manufacturer -- selling its Motorola unit -- and thus leaving Samsung as the lead player in the smartphone hardware space. In addition, Samsung would also stop developing its own app store, leaving to Google the dominant role in the app store space.
Google, for some reason, thought it was not worth the risk alienating Samsung and making it feel uncomfortable with Google as a device manufacturer. I have said in the past that eventually Google could become as big (or even bigger) than Apple as a smartphone manufacturer, simply because it could cut off Android to other manufacturers over time. Google decided it was not worth the risk, and preferred to have Samsung as an ally, rather than a foe.
And why did Google make such a move today? Well, because it does not feel threatened by a Samsung alienation anymore. Eventually, it will also go after Chinese manufacturers that are fragmenting Android. And if they don't comply to Google's wishes, being blocked from Google's app store is the least that will happen to them. Not having access to Google's apps is something else Google can easily do. As a reminder, a Chinese phone I bought for my wife a while ago does not work properly with G+.
What does this all mean?
It means Google is consolidating its dominance over Android with brute force, so as to avoid the remote possibility that a forked version of Android (most likely out of China) will ever become popular, or that anyone else ever has a remote chance to develop another app store.
And with Samsung as a hardware ally, it is at peace of mind knowing that it can concentrate exclusively on the software side of things, keeping Android clean of forked versions and consolidating its dominance over the code. In the grand scheme of things, it means that Google's dominance will continue.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.