No-compete agreement with Google might thwart Samsung's return to peak form

Samsung may not be able to bring in as many technologies as it would like with upcoming smartphones, thanks to a non-compete agreement with Google.

An existing agreement with Google stops Samsung from developing technologies that may compete with Google's products and services.

Back in 2014, Samsung signed a non-compete agreement with Google, thanks to which both companies were able to share their patents. However, the same agreement now holds Samsung back from introducing new technologies that are similar to Google's services or compete with them. As such, Samsung may not be able to introduce technologies like AI platform Viv, contactless payment platform Samsung Pay and music streaming platform Samsung Music app (the latter two aren't confirmed).

Samsung plans to roll out multiple foldable phones in 2017

"Since that time, Samsung has managed to use the fact that it outsells its nearest Android competitor by more than 2 to 1 to gain significant scale benefits to bring its margins back to double digit territory. However, with Huawei snapping hard at its heels it is once again looking to see if it can also use software and services to eke out some differentiation instead of relying purely on scale," says Richard Windsor, an analyst at Edison Investment Research to The Register.

According to Windsor, since Samsung can't do much about new technologies, it will have to sell as many handsets as possible with Google's software to ensure profitability in the long run. The fact that the Galaxy Note 7 handsets, on whose development Samsung invested huge resources, had to be ultimately recalled cost Samsung billions, further complicating Samsung's fortunes amid tough competition from several Chinese phone makers.

Samsung Galaxy S8: Leaks, features, pricing and release date

Thus, apart from launching flagship Galaxy S8 and Galaxy S8 Edge phones, Samsung may also launch a couple of foldable phones next year to corner the new space and draw as many customers as possible.  According to Sammobile, such a foldable phone would arrive in two variants, with one featuring a Snapdragon 620 processor while the other featuring the new Snapdragon 820 chip. Aside from the chips, the phone will arrive with 3GB of RAM, a non-removable battery and a MicroSD card slot.

Apart from the foldable phone, Samsung is also reportedly set to launch a new flip phone which it will name the Galaxy Folder 2. Galaxy Folder 2 is slated to feature 8GB of storage, 2GB of RAM and a 1.4 GHz processor which puts it in a category of most budget phones in terms of performance. The phone may also feature 5-MP and 2-MP cameras, a 2,000 mAh battery, a MicroSD slot and may run on Android 6.0.1 Marshmallow OS one launched.

Source: The Register

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