Apple, BlackBerry Hurt by Samsung's Debunking of Android Myth

By Salvatore "Sam" Mattera - May 7, 2013 | Tickers: AAPL, BBRY, GOOG, SSNLF | 56 Comments

Salvatore "Sam" is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Although Google’s (NASDAQ: GOOG) Android has become the dominant global mobile operating system, it has always faced one significant criticism: it isn't secure.

Android’s critics have long argued that while consumers (particularly budget-constrained consumers) may flock to Android, businesses and governments would shun the mobile operating system due to its security flaws.

But that theory was dealt a crippling blow on Friday when the Pentagon said it had approvedSamsung’s (NASDAQOTH: SSNLF) Android-powered Galaxy devices for employee use.

While Android likely won’t become the preferred enterprise mobile operating system overnight, Samsung’s approval has paved the way for greater Android adoption -- to the detriment of bothApple (NASDAQ: AAPL) and BlackBerry (NASDAQ: BBRY).

“Android isn’t secure”

It isn’t just fanboys that have slighted Android for its perceived lack of security -- rival phone executives have leveled the accusation.

In an attempt to make up for Android’s security issues, Samsung developed an Android addon it calls KNOX. Samsung’s KNOX creates a controlled environment within the phone -- like a separate container apart from the rest of the phone’s software. It was KNOX that earned Samsung the Pentagon's approval.

Yet BlackBerry’s Thorsten Heins wasn't buying it back in March. In reference to KNOX, he toldCNet:

"You don't know how many keys you've given to the main door of your house because it's open software," he said about Android. "So what are you trying to do? You're locking the windows."

Obviously, Heins has a vested interest in downplaying any potential Android rivalry. AsVentureBeat notes, the majority of the Pentagon’s employees remain loyal to BlackBerry. As BlackBerry has long lost the consumer market to Android and Apple, it can’t afford to lose its business users.

Apple’s Phil Schiller took to Twitter to blast Android

Like BlackBerry’s Heins, Apple’s Phil Schiller has also been critical of Android’s security. AsThe Verge points out, Schiller tweeted out a link to an F-Secure report last March. That report emphasized the large (and growing) number of malware threats Android faces.

Although the enterprise market isn't nearly as important to Apple as it is to BlackBerry, business users are a growing part of Apple’s strategy. Specifically with regards to iOS, as Apple continues to try to get businesses to adopt both the iPhone and iPad.

On the company’s last earnings call, Apple’s CFO Peter Oppenheimer remarked:

"Businesses around the world continue to scale iPhone across their workforces. Globally, nearly 30,000 companies are developing and distributing iOS apps for corporate use by their employees."

"Cisco’s Bring Your Own Device program across 80 countries has resulted in a 50% increase in the number of iPhones connecting to its corporate network in the past year."

With Samsung getting approval, it means Apple will face more competition in the enterprise segment.

Other Android makers will probably copy Samsung

Of course, the Pentagon only approved Samsung’s KNOX-enabled devices, not the entire Android operating system. However, now that Samsung has demonstrated it can be done, it seems highly likely that other Android manufacturers will follow suit.

Perhaps Google itself will pursue some kind of solution in future updates to Android. Chris DiBona, a Google engineer, discussed the topic in a blog post on his Google+ account. DiBona argues that security concerns for mobile operating systems are largely overblown, and that the companies offering security software are charlatans.

"Yes, virus companies are playing on your fears to try to sell you bs protection software for Android, RIM and iOS. They are charlatans and scammers. If you work for a company selling virus protection for android, rim or iOS you should be ashamed of yourself."

Clearly, Google is aware of the security criticisms Android faces.

Will Android dominate the business market?

The business world has long been BlackBerry’s stronghold, and if the company is going to remain relevant, it will need to continue to dominate that market. Apple doesn’t need business users, but enterprise adoption of iOS has long been seen as a potential growth area for the company.

For the most part, Android has been written off as a player in the business world -- that is, until now. With Samsung demonstrating that it can be done, other Android makers will likely follow with their own versions of KNOX.

Android dominates the global consumer base -- will that dominance soon extend to business users? Only time will tell, but it certainly seems possible.

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