I just want to be sure I understand your argument here: you think Google doesn't need Samsung because the loss of Android sales in the world's wealthiest economies will easily be replaced by more sales in China?
This is nothing to do with buying androids. As you stated, Samsung has a large chunk of the low end market, if Samsung stopped making phones, China (companies like lenovo) would increase production to offset this. For higher end devices, Android users would still have lots of options and Companies like LG, HTC, and Lenovo would be able to to pick up the slack. Samsung would still be making the parts for a lot of these phones, as their production has to go somewhere, Unless you think they will completely stop all production.
Do you have a reference that supports this? I thought I'd convinced myself this wasn't true, but there's some fuzziness between "inter company" revenue which is backed out of their revenues and "inter segment" revenues which don't seem to be. There's a line on their
cash flow statement that deducts "inter company" revenues, but reading it again along with footnotes makes me think that's revenues reported to another company in the Samsung empire. It looks like Mobile and Semiconductors are segments of one company.
First off the display business from your source is not even the biggest source of profit, the Semiconductor division is. The reason why the Mobile division has so much revenue but small profit is because those low end phone don't make that mobile division money. the division that makes the money on the low end phones is the SC division. Besides RAM and SSD for PC's, the SC business transfers most of it's production to the Mobile side. Selling the low end phones brings down the cost for the higher end devices through economies of scale. Samsung just can't stop making phones for years without laying off a huge amount of employees. Just the severance payouts would be ridiculous, no sain company would do this just to spite google. Considering what happened to NOKIA, microsoft and Blackberry, the chances of success would be slim. To top it off, once they return to production, most of the lines will be outdated.
You keep saying that adding another player (Google hardware) and sending current Android makers out to find other solutions is a good thing. I think that adds to fragmentation.
Having more partners will not add fragmentation. If the Pixel works and other follow suit and copy the strategy with vanilla or near vanilla, phones will be updated faster . Lenovo and other Manufacturers that use Vanilla android have been updating their phones faster. Fragmentation is not having to many manufacturers, it that phones are all on different OS versions. I got a 2017 Samsung A5 a month ago, the phone was sold with marshmallow when Oreo is already out. The update for nougat just came out last week and now my new phone is only 1 year out of date.
From your first post on this, you mentioned how android is an open garden and about choice for end users, well it's not as I can't chose to have the latest and greatest OS on my 2017 phone. Hopefully the Pixel will bring an end to this practice, what the point of google investing in android if the release of a new OS version is so anti climatic because you have to wait over a year to get the update. The S8 is not even on Oreo, I would be pissed on paying that kinda money and not having all the new features.
In order for Google to increase market share, they need a more uniform OS, not identical but more uniform. I think Pixel will help that and increase revenue for all partners . This year google is paying Apple 3 billion just to be the default search for iOS, with more market share, that cost would go down. Samsung is the chief fragmentor, with Bixby and other products. Google is not going to sit back and watch Apple trample all over android, Pixel is needed IMO to get the partners back in line and stop the fragmentation (OS- software)
