Samsung Electronics Co. (005930), the largest maker of televisions, will combine Google Inc. (GOOG) services with its Internet-connected TVs, overcoming previous differences over how to replicate their partnership in smartphones.
In the U.K., Samsung plans to offer TVs with the Google Chrome browser and Android application store before the end of the year, said Hyun-suk Kim, head of Suwon, South Korea-based Samsung's TV business. While Google wanted to make its Android system available for TVs, Samsung has worked to establish its own TV platform, he said.
"If Google will create then we have to work with them because they could be dominant," Kim said in an interview in Berlin today. "Google TV has been out there for two years but still we did not find the right experience with them yet."
Samsung, which became the world's top smartphone manufacturer after adopting the Android operating system, is wagering that mobile-phone users who are hooked to consuming content on their devices will want the same level of access at home -- and on bigger screens. The company is expanding the range of smart TVs as it bids to take its global market share beyond 30 percent.
Last quarter, Samsung accounted for 19.2 percent of all flat-panel TVs sold, according to market researcher IHS. That's about 9.4 million units, based on global shipments of 48.9 million TVs.
So far, Google TV set-top boxes and high definition TVs, produced in partnership with Sony Corp. (6758) and LG Electronics Inc. (066570), have received lackluster reviews and an even cooler reception from customers.
"We are working with them very closely," Kim said of Google at the annual IFA consumer-electronics fair, where it also unveiled Android smartphones amid a string of patent disputes with Apple Inc. (AAPL) "If we can find the killer experience, we will openly say we will be working with them."
A Google official today referred to a blogpost by Suveer Kothari, who heads Google TV global distribution, which said the companies "will be expanding the premium content and services available through Samsung Apps" as part of the agreement.
The partnership will pitch Samsung and Mountain View, California-based Google against Apple in a new industry. Apple is in talks with at least one of the largest U.S. cable companies to carry live television and other content, a person with knowledge of the plans said this month.
Google rose 1 percent to $688.18 at 11:14 a.m. in New York. Apple added 0.5 percent to $667.39. Samsung closed 1.5 percent higher at 1.233 million won in Seoul.
LG, the second-largest TV manufacturer, which began selling Google TV in the U.S. in July, is selling 5,00O units per month, said Kwan Sup Lee, a vice president of the company.
"We take the lead in partnership with Google," he said in an interview today. Samsung's own TV platform is currently "very closed," he said, adding that "they prefer a strategy where they lead rather than cooperate with others."
Samsung, which has kept its TV engineers and its smartphone team separate, sees television app stores to be less relevant for consumers than with smartphones, Kim said. While the company benefits from its size when striking content deals, it has just 20 local applications for TVs in the U.K.
"Samsung has the scale that's unparalleled," said Andrew Ladbrook, an analyst at Informa in London. "They pushed smart TV before anyone else did. They're winning a lot of that premium TV segment which is where you make all your margin."
The company is also working on a video-on-demand offer that brings different video streaming services such as Netflix Inc. (NFLX), Hulu LLC, and Amazon.com Inc. onto the Samsung platform, the executive said.
"It'll be a single idea with a single account," Kim said. "If we can combine the services, they will have to join."