Samsung Strikes it Big

Samsung has discovered what I have been saying for years. It helps manufacturers increase margins to use FLOSS. It’s simple maths. Costs are less with FLOSS $0 licences. You can also get a product to market faster because you share the code with others.

Samsung’s latest numbers are dramatic. 60% of their current profits are due to smart phones. They have 20% margins on the smart phones. What would their margins be if they paid M$ $50 per smart phone? Probably a lot closer to zero.

All OEMs should put as many products as they can out there using FLOSS, applications, GNU/Linux and Android/Linux. That includes folks who make a ton of money selling personal computers of all kinds. They can make more money or get a larger share by lowering prices if they use FLOSS. If Samsung can do it, so can HP, Dell, Acer, Lenovo, and the others.

see Samsung expects profits to double from smartphone boost

That’s not just smart phones, folks. That’s the whole business which has tiny margins except where they are using FLOSS to compete with the rest of the world.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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16 Responses to Samsung Strikes it Big

  1. oiaohm says:

    Clarence Moon really you are fooling yourself.

    Company to Company deals are not working out the way MS is liking.

    Yes MS spending money to acquire AOL patents recently is an attempt to sure up their position.

    Really Clarence Moon more and more is Microsoft slowly turning into a patent troll. Microsoft forgot the old saying live by the sword, die by the sword. You wield patents to destroy your competition. When your competitors have more patents than you when they wield their swords you are toast.

    Of course I have to be fooling myself. Because you cannot except the fact that all the patent actions MS did to try to stop Android has started the live by the sword, die by the sword process back on Microsoft.

    Patents are not how to control FOSS. Attempt to use patents to control FOSS risks having the hardware makers you depend on to be complete pricks and get the money back plus more.

    What is the advantage hardware makers have. They can embed there patented tech in there chips to sell on there devices you must use there patented tech. So Microsoft is on the path to doom. Software maker cannot push around Hardware makers end of story since they set the base rules you have to play by.

    Microsoft wants arm devices. So Microsoft has to embed patented techs of hardware makers in OS. So MS has to pay the hardware makers.

  2. Clarence Moon says:

    Microsoft is on the clear road to have to pay all the Android makers for every copy of windows they produce.

    Keep trying to fool yourself, Mr. Oiaohm. It is not a very difficult thing to do, apparently, and you seem to be rather good at it! You have certainly had a lot of practice.

    For variety, why not practice your musings on Mr. Bear and Mr. Koz, if they are indeed two entities. They seem like the type to embrace such utterings without much questioning and should be equally easy to fool.

  3. oiaohm says:

    Clarence Moon and everyone of those reports are only half the settlement. HTC, Samsung and others have used there Patent arms back against Microsoft.

    Those are written from the point of view that MS is getting the money. The simple fact and sad fact before MS started sabre rattling HTC, Samsung, Motorola and others in the mobile game mostly kept their patents for defence usage only. So Microsoft was not having to fork over one cent for there usage.

    Microsoft patent attacked Android asked for payment now those companies are asking Microsoft for payments on patents that cover every product MS releases.

    So really has Microsoft won. Really no. They have only won if they are going to become a troll. In fact its pushed up the price of Windows Phone 7 to install on devices. This has backfired. The idea to push up the price of android has not really worked.

    Its also more worrying that now those companies are going with a fine tooth legal teams looking to break the patents MS holds.

    The reports you are reading are only half the number.

    Samsung started off with the figure for Android installs being 10 dollars. With the patents ms is paying Samsung for that was level. Samsung is now only paying MS 7 dollars because a few patents got busted. So its now +3 to Samsung. When they break or work around a few more patents that + will increase.

    If Samsung and the others all destroy all the MS patents you are looking at +100 to every copy of windows at a min.

    This is what you call backfired. Microsoft is on the clear road to have to pay all the Android makers for every copy of windows they produce.

    Android is not laying golden eggs for Microsoft. Its turning into a toxic poison that caused MS to make deals they should not have.

  4. Clarence Moon says:

    Clarence Moon just because something is widely reported does not make it true…

    Perhaps, Mr. Oiaohm, but your ignorant braying about things is even less compelling. Samsung settled with Microsoft on terms akin to those reached by HTC and several others. That is a fact. The actual amount of those settlements have been reported by a number of others, for example here.

    Your inventions of silly arguments based on your misuse of the English language was originally amusing and even comical. But as time goes on, it has become quite irritating. Stop inventing these falsehoods and limit your comments to the very little bit that you seem to actually know anything about.

  5. Viktor wrote, “nobody reads your ramblings except us.”

    Last month was the most page views ever for this blog. We have readers on every continent and hundreds of them. About 25% of visits come from people searching for information using search engines. Dozens of different posts were read today. The blog is come kind of a “body of work” that is useful, thanks to Google. Each backup is now more than 40MB of XML (not including images and PDFs). I occasionally still get hits for an article I wrote years ago about some servers I built that had a few quirks in the mother board. ASUS made millions of those motherboards…

    Most of the comments do come from regulars, for better or for worse, but the readers are a much larger and more diverse group.

  6. oiaohm says:

    Viktor in fact Ohio Ham is not me. That was a shadow handle there exists another person who uses that exact handle. Funny how many stupid idiots want to alter my handle that way not knowing that user Ohio Ham existed first. So you are either insulting me or insulting him.

    Time moves on stuff does change. Linux Desktop users have seen change they have liked change they have hated.

    Viktor the true fact of the matter you had the idea you had something. Problem is I showed you where the 9 month delay is coming from making your link worthless. So now you have to resort to personal insults.

    Come on I have been in the game for over 15 years dealing with pond scum like you. Everything from abusing my handle to attempt to attack my sexuality. Nothing you can say makes me go away.

    So really personal attacks don’t bother me. Using someone else handle that they either are effected by my actions or me linked to them does annoy me. Because its not fair.

    So you owe Ohio Ham a sorry by the way.

  7. Viktor says:

    Got any more of those one-liners?

    How about:

    Stick around!

    A timeless classic from a classic Schwarzenegger movie that exactly describes the dilemma of Linux users. They stick around. And nothing ever happens.

    Linux is like a puddle of saliva on your desk that accidentally left your mouth while you were sleeping. Then, in the spirit of GPL, this saliva gets slurped up.

    You three — Pogson, Kozmcrae and Ohio Ham — should tour the world as a comedy troupe. Well, you’re doing this already, except that nobody reads your ramblings except us.

  8. kozmcrae says:

    Viktor said:

    “That’s Linux, all right. Only use it, if you deem your time worthless.”

    Hey Viktor, you forgot to mention that Linux is a “hobbyists” OS.

    I thought as long as you were laying down some of that old worthless FUD you might as well make it worth your while.

    Yeah, go knock yourself out. No one around here listens to that. Except maybe me, I get a real laugh out of it. Got any more of those one-liners?

  9. oiaohm says:

    Clarence Moon just because something is widely reported does not make it true. Cross licensing means MS is also paying Samsung an amount for every copy of windows. So Samsung is not really paying the full 7 dollars. 7 dollars is what the calculated value of the cross licensing payment. Not how much MS is getting paid.

    This is why patents sux for new small companies. Big companies can offset the patent cost with their own patents.

    Viktor 9 months is better than a lot of windows CE phones that got update never.

    “Spending money for nine frakkin’ months!” is not true at all. Lot of oems wait 6 months for people using CyanogenMod to try the new release out. Its the old thing let willing people be guinea pigs they will complain less if something goes wrong. Most people are not aware CyanogenMod Lead developer is full time Samsung staff and his second is full time Motorola. Yes this is why the release times from those two companies are about the same. Joint project on quality check causes that alignment. Yes CyanogenMod can get releases out inside days of Google releasing. Just will it be quality certified in that time no you need to let users download and test before signing off.

    After they are sure of quality what is 6 months normally. The next 3 months go in paper warfare if carriers will provide the update and if any regulator wants to dispute. People don’t consider the fact the Carriers also alter the software on the phone. So its not the makers alone who control what is going out the door.

    “Speaks for the insane release quality of Google’s code, when apparently the manufacturers have to do all the heavy lifting.”

    This is why manufacturers are working to take the Android kernel out of Google’s hands and for evermore transfer it to the kernel.org project.

    Yes the most buggy code in the Linux kernel has been the android support code. By a large margin. Quality control process at kernel.org turns out to be very well run.

    After this is done manufacturers may take out parts of android out of Google’s hands forever as well.

    Even Motorola wants the kernel transferred from internal development to kernel.org managed.

    The delay is the quality control aardvark. Yes the OEM have worked out how to far most of it out.

    aardvark the hard thing for people like you to get is Google is becoming less an less the upstream supply and general Linux projects becoming the upstream for large sections of Android could even be the majority of the code base.

    Yes large sections of the Android code base off the starting line are general Linux desktop libraries for the likes of image processing and other things.

    aardvark
    “Because then they would be involved in a true race to the bottom, and the skimpy margins in a competitive commodity market would be cut to the core.”
    This is why there is room for downloadable benchmark and test-suite application that can be installed into android phones.

    Wait this is one http://source.android.com/compatibility/cts-intro.html

    So basically its about time you kick the ass of Mobile phone reviewers. Part of the review should be running the test suites so makers not running them get shamed. aardvark.

    Even Microsoft windows 7 phones has been guilty of releasing without running test-suites so having bugs in that test-suite would have detected. This is preventable suffering of end users.

  10. aardvark says:

    “All an OEM has to do to instantly use Google’s released code is copy the hardware patterns in the SDK.”

    That’s possibly true (it leaves out the question of quality control, but let’s assume there’s no problem there).

    OEMs don’t do this, however. Why not? Because then they would be involved in a true race to the bottom, and the skimpy margins in a competitive commodity market would be cut to the core. Without differentiation of any kind, you’re basically toast, and a lot of these guys have already been burnt in the PC wars.

    It’s more reasonable, I think, to expect Google (as the upstream supplier) to react to the realities of this market, and in fact they seem to have started to do so with ICS. They’ve got a solid market position at the moment, and it will be interesting to see whether they can keep building on it — particularly after cocking a snook at their downstream chums by buying Motorola (relevant division thereof).

  11. The time to market with Android/Linux is much less than that other OS. Most of the delay is about drivers. Tweaking the user-interface is all on the OEMs, not Google. All an OEM has to do to instantly use Google’s released code is copy the hardware patterns in the SDK. The remerge with Linux will pool resources better and should cut down driver problems.

  12. Viktor says:

    Patents are good. The supposed profit margin Pogson’s touting will be all but eaten up once every smartphone manufacturer gets awarded this or that patent. At the end will probably be a construct like the MPEG-LA’s patent pools (for H.264 etc.).

    Let’s also not forget that it takes smartphone manufacturers nine months on average to adapt a new Android release for their phones. [1] Spending money for nine frakkin’ months! Speaks for the insane release quality of Google’s code, when apparently the manufacturers have to do all the heavy lifting. That’s Linux, all right. Only use it, if you deem your time worthless.

    [1] http://www.heise.de/newsticker/meldung/Android-Updates-kommen-zu-langsam-1517381.html (German)

  13. Clarence Moon says:

    Making up things again, Mr. Oiaohm? Or rather “still”? It was widely reported that Samsung is paying $7 per unit to license the patents infringed upon by Android. Quit making up fairy tales, you are too obvious to fool anyone.

  14. kozmcrae says:

    Clarence Moon said:

    “The fact that they are so profitable even while paying royalties at what some have indicated is the same sort of price level that they would have paid for WP7 itself shows that they probably could do the same with WP7.”

    Clarence does not have access to the terms of the agreement between Samsung and Microsoft. Isn’t that correct Clarence?

    You can assume anything you want but the fact is, no one outside of Samsung and Microsoft knows who is paying who what, or if any money is changing hands at all.

    Thanks to Barns & Nobel we know that Microsoft’s case for its so called intellectual property is laughable. There was an assumption that Microsoft held all the cards. We now know that is not the case. In a patent war, everyone is a victim.

  15. oiaohm says:

    Clarence Moon in fact Samsung cross licenses. So Samsung is not paying royalties. MS gets access to Samsung patents and Samsung gets access to MS patents.

    If you get into the fine print producing WP7 models gets them out of having to pay.

    Even so you have HTC and Samsung complain that about having to crush WP7 devices because they did not sell. Samsung produces one token WP7 device at a time. But are producing many android models reason android models are higher profit margin.

    Its also interesting in lot of recent Samsung soc chips there is no Microsoft support. This is the big change Clarence Moon Samsung soc chips use to always run Windows CE at a min.

  16. Clarence Moon says:

    Of course Samsung is one of the licensees of Microsoft patents involved with smart phone use and is also a supplier of WP7 models. The fact that they are so profitable even while paying royalties at what some have indicated is the same sort of price level that they would have paid for WP7 itself shows that they probably could do the same with WP7.

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