Samsung’s Transition
Samsung Electronics’ recent M&As and launches of new products suggest that it clearly shifted the focus of its core business to software (SW).
Expectations are also soaring that Samsung Electronics will make a successful transition to the SW-based ICT business, while emphasizing the importance of the SW business for more than seven to eight years and experiencing various failure.
Samsung Electronics has been leading the global smartphone market with its well-made hardware (HW) based on strong competitiveness of parts for many years. However, people are paying attention to what changes such revamping will bring to Samsung Electronics as equalization of global smartphone makers’ technological power and the fast rise of Chinese smartphone firms have warned Samsung Electronics that the Korean smartphone giant will not be able to maintain its market leadership with HW technology no longer
Samsung Electronics announced on November 16 that the company acquired NewNet Canada which owns a next generation mobile messenger named RCS (rich communications services) technology. If Samsung smartphones adopt RCS, Samsung smartphone users around the world can send large-size photos and videos via RCS and enable a group chat service.
The acquisition of VIV Labs by Samsung Electronics last month represents Samsung’s SW strategy. VIV Labs has open platform technology. Its open AI platform allows Samsung Electronics and other companies (third parties) to develop and deliver AI services for Samsung smartphones. Just as Apple App Store and Google Play have served as open application platforms, Samsung will be able to take the initiative in AI platforms.
Samsung Electronics also acquired Harman, the world’s number one automotive electronic parts company for to the tune of nine trillion won, judging that infotainment systems will play the most important role as “brains” in an era of autonomous vehicles and connected cars in the future.
The biggest pain in the past of Samsung Electronics which has dominated the smartphone market was its slump in the mobile operating system (OS) sector. In 2009, Samsung Electronics unveiled its next-generation mobile OS, “Bada” and released its software development tool (SDK) to its partners. However, Samsung Electronics’s new smartphone flopped in the OS market led by Apple's iOS and Google's Android.
Samsung Electronics did not give up and began to develop the Tizen OS with Intel in 2012. It was widely rumored that Samsung would give up Tizen, too even as the new smartphone OS failed to destroy strongholds of Apple and Google.
Recently, Samsung Electronics announced that it will support Tizen game developers with up to US$1 million per month at a game developer conference in India. That is to say, the company will give US$100,000 each to developers of top 100 download games every month.
Tizen was first installed in Samsung Electronics' smart watch Gear 2 in 2014. The smartphone OS has received a good response since the Gear S, Gear S2, Gear S3 among others were loaded with it. Since last year, Tizen has also been applied to the Samsung Z Series, ultra-low-priced smartphones for emerging countries such as India. The Z1 released in January, has sold over a million units in five months. The Z2 and the Z3 were also loaded with Tizen.
“Although Tizen did not lead the world like the iOS or Android, its value is duly recognized in the smart watch sector," an ICT industry expert said. “In the future, Samsung Electronics will be able to utilize Tizen in the smart device world where OSs are installed in automobiles and electric home appliances.”