Google Negotiates Deal With Samsung To Make Assistant, Play Store Feature More Prominently On Latter's Devices

Alphabet Inc GOOGL GOOG is holding discussions with Samsung Electronics Co. Ltd SSNLF for a deal that would give its apps further prominence on devices made by the Korean smartphone maker, Bloomberg reported late Tuesday. 

What Happened

Should the deal go through, Samsung's own services, such as the Bixby digital assistant, will take a backseat in favor of Google's digital assistant and Play Store apps, according to one of Bloomberg's sources.

The maker of Galaxy devices is ready to let Google’s apps take a center stage as the ongoing COVID-19 pandemic shrank the demand for mobile devices, and starved it of revenues — weakening its position to negotiate with Alphabet, Bloomberg noted.

Why It Matters

Worldwide smartphone shipments are expected to decline by 11.9% to 1.2 billion units in 2020, which is the biggest annual dip ever, according to IDC. Samsung, the largest smartphone maker in the world, sold 300 million phones last year and shipped 58 million smartphones in the first quarter this year, the research firm's data suggests.

The Sundar Pichai-led tech giant pays billions of dollars yearly for being the default search engine on rival Apple Inc’s AAPL mobile devices and the iPhone Safari web browser, and Samsung stands to benefit similarly by handing over real estate on its devices, Bloomberg noted.

Price Action 

Alphabet Class C shares traded 0.2% higher at $1,503.64 in the pre-market session Wednesday. Class A shares were mostly unchanged at $1,504.01.

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