Since it usurped Nokia to become the world’s biggest handset maker, Samsung looks to be in a position where it can do no wrong.
Unlike many of its rivals, it has been able to capitalise on Nokia’s weakness to grow its market share, while its flagship Galaxy S range provides the only real competitor to Apple’s iPhone at the high-end.
But Samsung’s current dominance in the smartphone market has one significant difference over the earlier leadership of Nokia and Apple (and the work of smartphone pioneers such as RIM and Palm) – it is not in control of the software platform used in its premium products.
Of course, some people will point to bada as Samsung acknowledging it needs its own platform strategy. But it is some time since Samsung announced a notable device using this OS, with its Android (and even, to a lesser extent, Windows Phone) devices instead taking the limelight.
According to recent figures from Kantar Worldpanel ComTech, bada lost market share during the 12 weeks to 10 June 2012 in all the surveyed countries where it was available – the UK, Germany, France, Italy, and Australia.
While there were some strong points – an 8.4 percent share in France, and 2.1 percent stake in Italy – the platform is generally languishing somewhere near the bottom of the table, below Microsoft’s much-maligned Windows Phone – and in some cases below the aging Windows Mobile.
The real issue, and more significant than the software capabilities of a platform itself, is the fact that with its current smartphone portfolio, Samsung is powering the mobile business of Google. Surely the key feature of Android is its close integration with the mobile Internet services provided by the search giant, including the Play content store.
Samsung has, of course, been working to build its own content and services portfolio. It has launched its Music Hub service, based on technology it gained through its mSpot acquisition, and also has its own Game Hub and Video Hub services.
And in order to use some features of the new Galaxy S III, users need a Samsung account, which at least goes some way to creating a link between the vendor and consumers, rather than the relationship being between the end user and Google alone.
But building a services business is expensive, and no guarantee of success – Nokia was something of a pioneer here, and look at what it now has left. Even mobile operators, who are arguably better positioned in the services value chain than device-makers, have struggled to build their content business.
For all that it is, Samsung is not Google.
What will be interesting to see in the coming months is what Samsung does with regard to the Tizen operating system. The company has been an early proponent of the OS, which is intended to merge assets from the LiMo Foundation – where Samsung was a major force – with the MeeGo platform that was previously the OS of choice for Nokia.
While there have been reported sightings of a Samsung device powered by the OS, and – unconfirmed – reports that it is set to merge its bada work with Tizen, by-and-large the company has played its cards close to its chest.
What Samsung really needs is a core platform that can support multiple device types. The South Korean company has been a leader in delivering “smart TVs” to market, and will see the value in a software platform which can serve multiple consumer electronics markets.
A single software platform operating across its smartphones, televisions, set top boxes and digital cameras would not only provide developers with a massive user base, but would also enable the vendor to differentiate itself with integrated multi-screen services, and create an ecosystem which will (ideally) see customers buying more and more Samsung products.
And Samsung has something on its side that neither RIM nor Nokia has: time. Unlike Nokia’s need to replace Symbian OS with MeeGo, before Stephen Elop cleared the decks for a move to Windows Phone; or RIM’s now delayed transition to BlackBerry 10, Samsung is currently working with the platform that has momentum on its side – with Windows Phone an interesting side-bet in the meantime.
Of course, one thing that Samsung will struggle to overcome, regardless of its own operating system and content strategy, is that through its search business, Gmail, maps and other products, Google will still be the dominant provider of Internet services. Reducing reliance on Android is not the same as cutting Google out of the loop entirely, and Tizen device buyers will still expect to be able to access services with a robust user experience.
Steve Costello
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members
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