Samsung’s Earnings Illustrate the Economic Power of Android

Sure, everyone knows that Android is winning over developers at surprising rates and competing neck-and-neck with Apple's iOS on smartphones, but it's easy to forget that Android has become a powerful economic force, too. Because Android isn't tied to just one hardware maker, we don't get steady reports giving us the total amounts of money that Android is generating. However, Samsung's latest earnings report provides a good glimpse of how dependent on Android-based smartphones the company has become. Its report also sheds light on why Google can hugely benefit as it moves into the smartphone business through its Motorola Mobility acquisition.

Samsung just reported net income of four trillion won, or $3.6 billion for the fourth quarter of 2011, and that's up from 3.42 trillion won in the fourth quarter of 2010. As BusinessWeek reports:

"Samsung shipped more smartphones last year than Apple did iPhones, with the popularity of its Galaxy models helping the Korean company sell a record 300 million handsets. Samsung, whose parent group plans a record investment this year, is introducing more phones and tablet computers to cushion slumping profits at its liquid-crystal display business amid a global economic slowdown."

Samsung is nailing down huge profits with smartphones based on Android, and could start to see healthy growth in its Android-based tablet business as well. Make no mistake, the competition between Samsung and Apple is fierce, too. Samsung sold more smartphones overall than Apple did last year, but Apple sold more handsets in the fourth quarter than Samsung did. It's no wonder that Steve Jobs was an enemy of Android to the point where he threatened to go "thermonuclear" on it.

Rarely has any open source platform packed the economic punch that Android now does. With Google putting Android at the center of its plans with its Motorola Mobility acquisition, Android's economic importance to some of the world's most powerful companies will only grow.