Samsung’s Mobile Implosion Sent 2014 Android Hardware Profits Plunging

There's no denying that Android is the dominant platform in the mobile world -- market share figures from different sources all tip the scales heavily in the open source operating system's favor. However, market share is only part of the equation. The other part is profits, and according to analyst Chetan Sharma, global profits in the Android hardware sector dropped in 2014 by half compared to the year prior.

This is notable because it's the first year there has been any kind of significant drop in Android hardware profits. And that's not a knock against the mobile OS, though it is a reflection of how the market is playing out.

Image Source: Flickr (samthor)

It's also worth pointing out that Samsung shoulders much of the blame here. The company's flagship Galaxy S5 device didn't sell nearly as well as it had hoped, prompting the South Korean handset maker to shake things up in its mobile division. High-level executives were patted on the backside and thanked for their service while being shown the door, pink slips in hand, and there's a new strategy brewing at Samsung, one that will see a smaller collection of devices going forward.

Nevertheless, this isn't something that 
Google should ignore or simply brush off as a one-time thing -- there's too much at stake for that. As Sharma pointed out to Recode, Google needs Android to stay "healthy and balanced," because "without profitability, some of these players will eventually disappear" leaving behind an ecosystem made of Samsung and Chinese OEMs. Such a scenario was never part of Google's vision.

It should also be noted that while Google doesn't profit from Android directly, it scores all kinds of dollars from the services that Android users adopt.