The Fifth Horseman: Samsung

We all know the "four horsemen" of tech: Amazon, Apple, Facebook, and Google. These are the companies that pretty much everyone agrees will shape the foreseeable future of the tech sector. In some circles, that list makes waves for who is not included: Microsoft. But any rational thinker (meaning those outside of Redmond or anyone who hasn't made a career as a .Net developer) knows that Microsoft simply no longer belongs on that list.

But that doesn't mean the list is perfect. In fact, I do think there's an omission that's becoming a glaring one: Samsung.

Sure, Samsung is not an American company (it's South Korean). Nor did it start as a scrappy technology startup that set out to change the world (it started in 1938 as a local produce trading company). Nor does it operate like an American technology company (the entire company is and has been run largely by one family, even through national scandals). Hell, Samsung isn't even just a technology company (but Samsung Electronics, which I'm clearly going to focus on here, is by far the largest subsidiary of the Samsung Group).

But trying to suggest that Samsung is not one of the most important companies in technology is increasingly folly. In fact, there's a decent chance that it will end up being the most important tech company of 2013.

This week, Bloomberg reported that Samsung would start selling Tizen-based phones in 2013. According to Jungah Lee's sources, this is at least in part due to Google's purchase of Motorola last year. This is important because Samsung is by far the most important Android partner. Not only does it dominate from a market share perspective, it's really the only Android OEM that is actually making any money. (Motorola, by comparison, is a total dog that is actually losing money.) And it's making a ton of it.

The company (again, just the Samsung Electronics group) posted about $155 billion in revenue in 2011. That's almost exactly the amount of revenue that Apple posted in 2012. Samsung should come in closer to $190 billion when its fiscal 2012 comes to a close.

Not only is it bigger than Apple from a revenue standpoint, it's almost twice as large as the three other "horsemen" combined ($190 billion versus what should be about $100 billion for Amazon, Facebook, and Google in 2012). And unlike Amazon and Facebook which make little or no profit, Samsung is hugely profitable. $12 billion in profit for 2011 should move closer to $20 billion in 2012. That's not a ton compared to Apple ($55 billion in profit in 2012), but it should be roughly twice as much profit as Google pulls in for the year.

But let's forget the money and go back to Android. Samsung is so important and deserves a place with the other horsemen because it is the most important piece of the Android ecosystem beyond Google. And it seems that the company is at least exploring the possibility of taking a step back from that ecosystem, or hedging its bet. That could be the story of 2013.

Imagine Samsung, with 40 to 50 percent of the Android market, breaking away to focus on Tizen. Or perhaps more realistically, imagine Samsung forking Android for its own purposes while exploring the Tizen possibilities. Not only can the company afford to do it, there may be several incentives to do so.

Amazon is closing in on its own phone running a forked version of Android in a similar manner to its Kindle Fire tablets. The first iterations of that tablet weren't great, but they're getting better. And because it now has its own forked Android app store, Amazon is going to be in control of the entire ecosystem. Samsung has no such control if it remains a loyal Android partner.

Maybe it's okay with that, but Samsung must be looking at how profitable Apple is as a result of its total control. Shitty mobile skins only give the illusion of control, Samsung needs to control the full stack. And given its position of power, the company has the leverage to do that if it chooses to.

And it's not just an offensive imperative, it's a defensive one too. Google continues to say the right things publicly about maintaining distance from its Motorola unit with regard to Android. Of course, it says this with the Google X phone project well underway. A true Google phone.

Perhaps it's a project meant less to scare Samsung and more to fight back against Google's true bane: its carrier partners. Or maybe it's Google hedging against Samsung's position of power. It doesn't matter. The Google/Samsung relationship is starting to show signs of strain, and they're only going to get more pronounced — exhibit A.

Beyond mobile devices, the hot topic for 2013 is the future of television. Most of this is focused around Apple with a little bit reserved for Google's TV projects. But it's once again Samsung that is already the leader in the space. Sure, it's the old school (shitty margin) television space, but why doesn't anyone think that Samsung can translate its success in smartphones here as well? It simply hasn't really tried yet.

Perhaps that's another part of the Tizen equation. Or maybe a forked Android will find its way here as well. But Samsung has a huge head start on Apple, Google and everyone else.

And Samsung isn't stopping with phones and televisions (or memory chips and flat-panel displays where it is also the global leader). Chairman Lee Kun Hee recently gave a speech to employees underscoring the need to venture into new businesses. The son of the man who started the produce trading company knows that the future of his company will be products that don't even exist today. Samsung is in this for the long haul.

It feels as if the recent Apple/Samsung legal battles have branded the South Korean company as little more than a copycat in this country. But that's a dangerous underestimation of a company that is quickly becoming one of the most important ones in tech right now by pretty much every metric. A fifth horsemen.