Microsoft and Nokia have big plans in the mobile arena in China. But Samsung and Google have big concerns. The Android camp has joined forces with Chinese mobile phone makers to let China’s Ministry of Commerce know where they stand on the deal.
According to a Bloomberg report, Google and Samsung asked China to make sure the $7.5 billion bid doesn’t result in higher fees on wireless technology patents that will remain with Nokia. The paper cited “two government officials familiar with the matter.”
Bloomberg reports that the companies, which also include Huawei Technologies and ZTE Corp., are worried Microsoft will gain more power in the local smartphone market or may abuse its patents. The parties want Chinese regulators to set conditions on the deal, the paper said.
Why is Google Afraid?
We caught up with Roger Entner, a principal analyst at Recon Analytics, to get his take on the opposition. He told us at some level Google’s complaint is hypocritical, given that the company acquired a major handset maker called Motorola for $13 billion.
"In China, Windows Phone has an impact," Entner said. "It has more market share than in the U.S. Google is afraid of what impact a stronger Nokia in the Chinese market could have on Android sales . It’s a typical competitive move and it’s a self-protective move."
Entner said Samsung has similar motives. Nobody wants a stronger competitor in any market and a Microsoft-Nokia tie up certainly makes for a stronger competitor, even though Windows Phone 8 is not a dominant force in China or other nations.
Checking the Box
Indeed, globally Android has 78.9 percent of the smartphone market, with Samsung leading the charge on Android devices, according to market research firm IDC’s latest report. Apple has 14.9 percent market share while Windows Phone comes in a distant third with 3.9 percent. Blackberry has 1 percent and the rest of the market players combined have 1.3 percent.
In terms of market share, IDC predicts Android will maintain its reign as the leading operating system. With a strong presence within emerging markets and attainable price points for both vendors and customers, IDC expects both a commanding market share as well as prices below the industry average. What remains to be seen is which vendors will win the contest within emerging markets, as many local vendors have gained share last year.
Still, Entner understands why Google and Samsung are lifting their voices in protest.
"If nobody protests and Android and Samsung lose market share in China as a result, they have no defense internally," Entner said, calling it a "corporate CYA move."
"Microsoft Windows Phone has such low market share in just about every market that no one should prohibit that move for competitive reasons," Entner said. "But, still, you have to protest it. It’s like checking the box."