This paper examines two major strategic alliances formed by Google: a ten-year patent cross-licensing agreement with Samsung for Android mobile devices, and a partnership with Luxottica to develop and market Google Glass through premium eyewear brands. The paper analyzes how these alliances address competitive challenges and market positioning. The Samsung alliance is compared to the historic Microsoft-Intel partnership, highlighting Google's decision to divest Motorola Mobility to maintain ecosystem neutrality. The Luxottica partnership demonstrates Google's strategy to overcome consumer perception challenges and tap into enterprise applications for wearable technology. Both alliances illustrate how technology companies leverage partnerships to expand market reach and credibility.
Google and Samsung have entered into a ten-year patent agreement to share in each other's patents via cross-licensing through what Samsung calls a broad range of technologies and business areas (Holly, 2014). The alliance between Google and Samsung for Android mobile devices has been described as something similar to the Microsoft-Intel alliance for Windows personal computers. To form this alliance, it required Google to sell its Motorola Mobility business to Lenovo for $2.9 billion, ensuring that Google would no longer be making Android handsets and would not be a direct competitor to Samsung in mobile devices (Gapper, 2014).
Samsung had previously been the shining star for Android-based devices. When Google bought Motorola in May 2012, Eric Schmidt flew directly to Samsung's headquarters in South Korea to personally assure its executives that Motorola would not receive special status in the Android ecosystem (Hiner, 2014). Schmidt explained his reasoning: "I told them that the [Android] ecosystem has to be favored at all costs. The Motorola products can't be unduly favored, unless you're also unduly favoring Samsung. If it looks unfair, and then the ecosystem unravels, then it's a terrible mistake."
The deal made between Samsung and Google consisted of a long-term patent licensing agreement in which the two industry giants would collaborate using key patented technologies for Android handsets. Google gained greater control over its Android devices through this alliance. Samsung agreed to play the role of device manufacturer and allow Google to use its software and operating system. Previously, Samsung had used the Android-based platform but customized the system for its own devices. This new arrangement formalized a division of labor: Google would focus on the operating system and ecosystem, while Samsung would concentrate on hardware design and manufacturing.
Luxottica and Google agreed to work together on the creation of innovative iconic wearable devices. Through this relationship, the two companies—setting the pace in their respective industries—would match high-tech developers with fashion designers and eyewear professionals (LUXOTTICA, N.d.). Luxottica added that its two major proprietary brands, Ray-Ban and Oakley, which has a ten-year heritage in wearable technology that evolved from MP3 to heads-up display (HUD) devices, would be part of the collaboration with Glass (LUXOTTICA, N.d.).
Google Glass technology has been perceived by popular culture in many ways. There was significant backlash against the glasses, with critics calling them nerdy and bland. Therefore, to make Glass products more appealing, Google sought to unite with one of the largest sunglasses brand designers in the market. Luxottica, the world's largest producer of sunglasses, pledged to design "innovative iconic wearable devices" under its marquee brands Ray-Ban and Oakley, and expected to have its Glass collection hit the market in 2015 (Fontevecchia, 2014).
Many developers and early Glass users were beginning to lose interest in the much-hyped, $1,500 test version of the product—a camera, processor, and stamp-sized computer screen mounted to the edge of eyeglass frames (Oreskovic, McBride, & Nayak, 2014). The consumer model was being put on hold regarding app development because there was not a large enough market for the product on a mass scale. However, significant demand was perceived in the business world.
Enterprise applications offered more immediate promise for Glass technology. For example, equipment repairs could be revolutionized: technicians could look at an engine, have the Glass recognize which components are in view, and call up the instruction manual for those components. If the repair proved tricky, the technician could live-link to the engineering department and stream video back to a local expert, who could advise how to complete the repair (Neely, 2014). This use case demonstrated that Glass's value proposition was strongest in specialized professional contexts rather than general consumer markets.
The technology is in the early stages of development, and much of the demand will be specialized in the business-to-business sphere as well as among some early adopters. However, by forming alliances with the popular eyewear brand, Google can likely get closer to growing a larger demand in the consumer market. Both alliances reveal Google's sophisticated approach to managing competitive dynamics and market positioning. The Samsung alliance prioritizes ecosystem health over direct hardware competition, while the Luxottica partnership addresses perception barriers by leveraging established design credibility in fashion. Together, these alliances demonstrate how technology leaders use strategic partnerships to extend market reach, mitigate competitive threats, and develop new product categories.
Fontevecchia, A. (2014, March 25). Google Glass Ray-Bans? Partnership with Luxottica makes founder del Vecchio $700M richer. Forbes. Retrieved from http://www.forbes.com/sites/afontevecchia/2014/03/25/google-glass-ray-bans-partnership-with-luxottica-makes-founder-del-vecchio-700m-richer/
Gapper, J. (2014, January 30). Is Google-Samsung becoming the new Microsoft-Intel? Financial Times. Retrieved from
Hiner, J. (2014, March 14). Samsung and Android: The next Wintel or destined for divorce? ZD Net. Retrieved from http://www.zdnet.com/article/samsung-and-android-the-next-wintel-or-destined-for-divorce/
Holly, R. (2014, January 27). Google and Samsung shore up alliances with a 10 year patent agreement. Geek. Retrieved from
LUXOTTICA. (N.d.). Deal for Glass ushers in new market of smart eyewear. Retrieved from http://www.luxottica.com/en/luxottica-google-glass
"Long-term growth and market expansion through partnerships"
You’re 93% through this paper. Sign up to read the remaining 1 section.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.