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Samsung Will Be “Slaughtered” In 5 years

In a revealing interview with Business Insider, CEO of Cyanogen Kirt McMaster, argues that the current Samsung and Apple duopoly will be “slaughtered” in the next five years by smaller OEMs.

Cyanogen is partnering up with Qualcomm – one of the world’s biggest chips-makers – to ship its CyanogenMod software (a popular custom version of Android) with its processors. This is known as a turnkey deal, which means that Qualcomm will be able give permission to manufacturers to use its chips and also provide the software to run it.

McMaster thinks that this deal will be huge for Cyanogen cracking developing markets, where the Android platform is extremely popular. “The next major disruption is going to occur around the commoditization of hardware.” McMaster explained.

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He continued: “Over the course of the next 3-5 years, it will impact every market on the planet. It’s mostly being felt now in emerging markets. The reason it’s being impacted there is because of the turnkey model. It allows these local OEMs to arise out of nothing.
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“On the global platform, we see Xiaomi becoming the No. 3 OEM. Micromax is now No. 10. These guys are basically creating really cheap handsets that have really awesome performance. This is made possible because of Qualcomm’s turnkey solution as well as Mediatek’s.

“The tier one OEMs like Samsung are going to be the next generation Nokias in the next five years. They’re going to be slaughtered. We think long term Apple itself will have problems because they’re just not good at competing at the low end.”

McMaster’s predictions come down to the idea that no company is too big to fall, and companies operating in developing markets are seeing huge gains in small amounts of time. Xiaomi, OnePlus and others have strong local support and understand local markets that are seeing increasing interest in low-end devices.

McMaster argues that this local knowledge, combined with a turnkey solution, will make it easier for other companies to start with little and see success, which could be bad news for the bigger players like Samsung and Microsoft who want to plant their low-end flag in these markets.

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“It could get pretty bad pretty damn quick [for Samsung]. This is often the case. Look what happened to Research In Motion (RIM). Look what happened to Nokia. Last summer Micromax surpassed Samsung as the dominant feature phone player in India. We’re talking literally in eight months this occurred.” McMaster said.

“This is just one market. We see this happen all over the world. We see these local kings, [such as] Blu Products in Latin America [and] Cherry Mobile in the Philippines. All of these guys are arising. They understand local marketing and distribution better than any incumbent that attempts to move into the region. These guys are hustlers; they’re fast moving. They know what it takes to influence market dynamics.” He continued.

Android war

McMaster has a very different vision for the future of Android to that of Google’s. Where Google wants to further integrate its services into the core functionality of the OS, providing users with a complete Google experience. McMaster wants to open Android up and allow third party services to become part of the core functionality rather than just an app.

“As an example, today if you use Google Now and say “Play X song,” what happens is that song is indexed, Google searches and comes back and gives you a song in Google Play Music. And if you click that link, that query obviously favors Google’s own services. In no way does the core natural language engine of Android, iOS, or Windows Phone know that Spotify may be the only way I interact with music. We can give Spotify that deep level of integration at the kernel level.”

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