Samsung remains the leader in Android sales and market share, but it realizes the danger in building a product strategy that is contingent on a third-party platform. This is especially true if Google continues to put more energy into Chrome devices than Android. Samsung also knows that it can make more money off of its own ecosystem of services rather than the Google services that dominate Android devices. As a result, Samsung has chosen to sponsor the development of Tizen, a Linux-based open source mobile platform that’s struggling to emerge as an alternative to Android.
One way Samsung supports Tizen is through the sponsorship of the Tizen Developer Conference. Samsung has sponsored the conference alongside Intel since its inception in 2012 and will sponsor the third annual conference this year. The 2014 Tizen Developer Conference will take place June 2-4 at the Union Square Hilton in San Francisco and it will feature keynote addresses, sessions, and a developer lab.
The elephant in the room is the fact that Samsung, a successful Android vendor, is sponsoring the development of another mobile ecosystem that could be a potential competitor for Google’s mobile platform. In decoding what Samsung’s involvement with Tizen means for its relationship with Google, there are two factors at play: emerging markets and the Internet of Things (IoT).
Stepping into emerging markets
One of the major issues faced by Android vendors today is the challenge of maintaining a specific Android user experience across devices, while differentiating a high and low-end offering. The problem is, no vendor has been able to accomplish this successfully. This is the reason Samsung has kept its devices on the high-end of the spectrum.
“Tizen lets [Samsung] go down market, perhaps where Android can’t. The most recent version of Android is designed to run on a relatively low-spec device, but if I’m Samsung I want a separate flavor of devices at that lower end. I don’t want to cannibalize my own Android sales,” said Chris Silva, a research director at Gartner.
The idea here is that low-end devices can devalue high-end devices with similar features. Offering even one Android device at the low-end risks eroding the value of the high-end Android devices, because Android from Samsung is going to look like Android from Samsung to most consumers, regardless of model number. Tizen gives Samsung a way to capture the low-end, without using Android to do it.
While this helps to partially clarify the reason behind Samsung’s support of Tizen, it still doesn’t explain why they want to target the low-end in the first place. Samsung is already successful with Android, especially in the US, so what would necessitate the need for a low-end offering?
The answer is emerging markets, particularly in the Asia-Pacific region. Google doesn’t have as much of a foothold there, as they do in the US, and Samsung can leverage that market as a new revenue arm with Tizen devices. It also gives them the chance to be early to that market and capture some of that early mindshare and market share.
“Keep in mind that the Asia-Pacific markets, especially China, are still not as open as other other governments to allowing Google to come in and have all the traffic run through Google’s servers. This gives Samsung an opportunity to sell devices in their own geography, in their local geography; to sell them without those types of concerns — without having their device OS tied to the vendor that is monitoring traffic, if you will,” said Michael Facemire, a principal analyst at Forrester.
Emerging markets, like those in the Asia-Pacific region, will give Samsung the ability to prove the viability of a low-end Tizen device and build their user base to provide additional revenue support if something were to ever happen with Android. Outside of emerging markets, Tizen also gives Samsung a platform to build peripheral devices and compete in the IoT space.
More than just smartphones
According to Pew Research, nearly 60% of American adults owned a smartphone in 2013; and that number will continue to go up. Even the most tech-averse consumers are jumping on the train, realizing that the features often outweigh the fear of learning something new. Due to this, the market for smartphones is shrinking, meaning vendors will need to look to peripheral devices and IoT to maintain revenue.
“There’s, sort of, an event horizon in the developed world for smartphones and tablets where you get to a certain level of penetration and everybody has one,” Silva said. “So, there’s only so many things that run Android, if I’m Samsung, that I can sell. So, to get into that peripheral market is really important to continue growing the market for Samsung-branded electronic products.”
What Samsung needs to focus on is growing their brand identity apart from Android. It’s important for Samsung to diversify so they can offer products that circumvent the penetration of Android smartphones. According to Facemire, as IoT gains steam, there will be many smaller companies making an OS play; and customers may not care much about the OS when IoT hits its stride.
“People are going to be much less caring about what the OS is and much more reliant on does it work, does it do what I want it to do, and how much does it cost,” Facemire said. “Those are going to be the driving factors. It’s not going to be an Android versus iOS world, it’s going to be a device versus device world.”
The critical thing, if the market becomes OS-agnostic with IoT, is that Tizen has to work in existing ecosystems. According to Facemire, a robust API model is essential to make sure Samsung’s Tizen devices play well with others. That’s where a developer conference like the Tizen event next week becomes especially important, as Samsung must be able to guarantee a high-degree of interplay across ecosystem.
When it comes to Intel’s role in backing Tizen, it’s all about building rapport with the OS provider and aligning itself with the products.
“Intel’s a little late to this game, in terms of being a force in mobile, so they really need to do volume,” Silva said. “They need to be friendly with the Android ecosystem, they need to be friendly with the Tizen ecosystem. If they want to ship a billion Ivy Bridge chips, or whatever it is that they are looking to push out, they need to be on as many different platforms as possible. That, alone, is reason enough for them to back Tizen.”
When it comes to a Samsung Tizen smartphone, the most recent announcement slated the device for a Q2 2014 release. For those interested in attending the conference the fee is $99 and you can register here.
What do you think?
We want to know. What do you think is the reason behind Samsung’s support of Tizen? Are you excited about the possibility of a Samsung Tizen smartphone?