Imperfect Relationship
As Samsung Electronics has considered changing the default search engine for Galaxy smartphones from Google to Microsoft (MS), a crack has appeared in a 12-year-long relationship between Samsung Electronics and Google. Under these circumstances, as the launch of Google’s first foldable smartphone is on the horizon, many observers believe that Samsung Electronics and Google are parting ways in mobile hardware and software.
According to the foreign press and sources in the electronics industry on April 25, a potential crack has occurred in a partnership between Samsung Electronics and Google since the middle of April. Samsung Electronics is considering changing the default search engine for Galaxy Smartphones to Microsoft’s Bing, leading to various speculations in the industry.
Bing is a search engine that uses Microsoft’s generative artificial intelligence (AI) technology. Powered by GPT-4, a language model of OpenAI, Bing is different from existing search engines in that it can provide complete content based just on text or images. For Samsung Electronics, it is also an opportunity to join the current chatGPT craze and further enhance the competitiveness and differentiation of Galaxy smartphones.
Google provides a basic search engine for Galaxy smartphones for an annual fee of US$3 billion (approximately 4 trillion won) from Samsung Electronics. It is called the Android alliance, but Google may lose this money if Samsung Electronics turns to Microsoft for Bing.
“It is a big shock to Google that Samsung Electronics, which produces hundreds of millions of Android smartphones every year, is considering changing its default search engine,” the New York Times added. Samsung Electronics did not take any position on the report and neither confirmed nor denied it.
The Android Alliance dates back to 2010. In 2007, Apple introduced the iPhone, which ushered in the era of smartphones. Samsung Electronics did not have an operating system (OS) for smartphones at the time, and Google did not have a smartphone lineup. Thus, they saw eye to eye on starting a collaboration for their mutual interests. Later, in 2014, they signed a patent-sharing agreement or cross-licensing agreement and took their partnership to the next level.
However, the two tech giants continued to develop their capabilities in both hardware and software. In 2015, Samsung Electronics released the smartphone Z1 powered by its own Tizen OS instead of Android. The following year, in 2016, Google entered the smartphone market in earnest by releasing its own Pixel.
Cooperation and competition continued between the two in recent years. In 2021, Samsung Electronics adopted Wear OS in cooperation with Google for its smartwatch lineup, the Galaxy Watch. However, a year later, Google entered the smartwatch market with the Pixel Watch, a competitor to the Galaxy Watch. After another year, the crack between the two companies seems to have expanded as observers say that Samsung Electronics has been considering changing its search engine to Bing this year.
As a consequence, Google is also expected to further expand its portfolio as a manufacturer. In particular, this year Google will make its foray into the foldable phone market where Samsung Electronics currently has more than 80 percent market share. Google has already been developing foldable phones internally for several years with code names like Passport, Felix, and Jumbojack. Many foreign media outlets, including CNBC, predicted that Google's first foldable phone would be unveiled and sold at Google I/O scheduled to be held this May.
No final decisions have been made. Whether or not Samsung Electronics’ search engine change will become a reality is yet to be confirmed. Whether or not Google will release a foldable phone has also been rumored but has not been clarified. “Samsung Electronics strengthening cooperation with Microsoft and Google expanding its manufacturing portfolio may be beneficial in the long run, but nothing has been decided yet,” an electronic industry insider said. “Industry insiders are also closely monitoring the two companies’ choices.”