Two-track Strategy
Keen attention is paid to wearable device manufacturers’ business strategies with new products coming out regularly. Samsung Electronics is maintaining a closed strategy, that is, to connect its wearable devices like the Galaxy Gear 2 only with its hardware products. Meanwhile, other companies such as LG Electronics, Motorola, and Sony have adopted an open strategy so that their devices can be connected to a wide range of other devices and platforms.
Apple and Samsung Electronics are two of the typical examples of those employing the closed strategy. The latter has recently announced that its Galaxy Gear 2, Galaxy Gear 2 Neo and Galaxy Gear Fit can be linked only to the Galaxy-series smart phones and tablet PCs. The previous model o the Galaxy Gear connected only with the Galaxy Note 3.
Apple, which has yet to release its first wearable device, is maintaining the same strategy via cooperation with third-party manufacturers. For instance, Nike has recently unveiled its Fuel Band SE, which supports only iOS, and Misfit Shine has released its application only on the Apple App Store. The iWatch, scheduled to be unveiled in September, is likely to be available only for iOS users.
“Companies with a high market share in the mobile market want to continue their presence in the wearable device market as well, and this is why they work on devices connected only to their products,” said an industry source, adding, “It seems that Samsung Electronics, which has worked very closely with Google in the smart phone sector, has adopted the closed strategy so as to become a dominant force on its own in the wearable device industry.”
In the meantime, watchers say it is hard to believe that Samsung Electronics uses the open-source Tizen OS in its Samsung Gear 2 while limiting the devices’ connection to only the Galaxy series of products. Tizen OS is a platform developed not by Samsung alone but by the 10 members of the Tizen Alliance including Intel, Huawei, KT, NTT Docomo, and Orange. The number of partner firms associated with the group amounts to 51, including manufacturers like ZTE. Nonetheless, the first wearable device of the group is likely to be a closed-platform product using the Samsung brand.
Some industry experts are predicting, though, that Samsung’s strategy is unlikely to work out with Google moving aggressively to dominate even the wearable equipment market with a variety of manufacturers. The search giant has unveiled its Android Wear and releases LG Electronics’ and Motorola’s smart watches in June this year. Devices based on the Android Wear can be connected to all smartphones and tablet PCs running Android OS.
Under the circumstances, Samsung Electronics is also expected to launch Android Wear smart watches in a two-track strategy so as to reduce the risk of the closed strategy.