Samsung And Google In Divorce Court?

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 |  Includes: AAPL, AMZN, GOOG, MSFT, SSNLF
by: Dana Blankenhorn

Google (NASDAQ:GOOG) and Samsung (OTC:SSNLF)have canceled a press conference scheduled for next week, where they were to debut the latest version of Google's Android software, dubbed “ice cream sandwich,” and a Samsung Nexus phone running it.

The “Samsung Mobile Unpacked” event was scheduled for the fall CTIA show in San Diego. “We agree that it is just not the right time to announce a new product,” the press statement on the cancellation read.

Many reporters assumed the death of Steve Jobs made the two Android partners fearful next week is too soon. But could there be more to it?

Samsung's profitability is down. It's paying Microsoft (NASDAQ:MSFT) money for technology it supposedly got from Google for free. Its Galaxy tablet, based on Android, is being hammered in courts around the world by Apple (NASDAQ:AAPL), and now it looks set to be replaced in the public mind by another Android tablet, the Amazon (NASDAQ:AMZN) Kindle Fire.

Meanwhile, as part of its patent deal, Samsung agreed to roll out a Windows Phone. The Omnia is getting strong reviews, with most of the praise going to Microsoft, and if it can get that software for anywhere near the price it's paying in court for Android, why not?

Add to that Samsung's plan to support an open source project dubbed Tizen, based on an old Intel (NASDAQ:INTC) design supported by the Linux Foundation, folding its own open source Bada into the deal, and the message starts getting clearer.

Even if there's no divorce, Samsung is seeing other software.

The Google plan for Android was to do to Apple what Microsoft had once done, work through OEMs with a “just as good” software platform that would eventually turn Apple into a niche product. Things have not gone entirely to plan. It's true that Android is the leading phone platform, but both carriers and OEMs have been loading it with crapware, and Google's move toward central control and its own design, through Motorola Mobility (NYSE:MMI), may be leading to an OEM revolt.

Samsung is not the only big Android OEM now supporting Windows. HTC is as well. With Nokia (NYSE:NOK) practically a Microsoft subsidiary, the original plan is not looking so strong. Especially since Amazon is calling its Kindle Fire a true fork, and doing everything possible to keep Google from making a dime off it.

Worse, other OEMs are moving off the Android reservation. Acer and Asus are both looking at Tizen development and the Linux folks are quick to note the open source OS is not just designed for tablets and phones but also smart TVs, netbooks, in-car infotainment systems and other platforms. (It must also be noted here there remain Tizen skeptics who emphasize that “without the single-minded direction of a single vendor, a platform cannot succeed.”)

Google could take the pressure off by delivering a really cool Motorola phone, but that deal will take months to close. Meanwhile, any dealings with Motorola have to be arms-length, meaning it can't overtly favor one OEM over another, lest the others get even more spooked than they already are.

Yes, I continue to own 20 Google shares. But I'd like to hear what the company plans to do all about this.

Disclosure: I am long GOOG.