Samsung Electronics will focus more on software going forward, not the hardware

Samsung has, for quite some time now, been leading the global smartphone market with its well-made hardware based on strong competitiveness of parts for many years. But as the market gets flooded with cheaper Chinese options that provide a flagship experience with the price of smartphone components coming down, it is getting increasingly difficult to justify the price tag for Samsung’s flagships.

Cheaper device models are able to provide a smooth, joined up experience for the customer once reserved for flagship models. Companies such as MediaTek have introduced new, higher performance mid-range chipsets, and Samsung itself has contributed to this by selling its AMOLED panels at more affordable prices, meaning that more and more models are gaining this once-premium display type.

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It took Samsung more than six years to reach the Galaxy S7 hardware, a lot of cash went into R&D, but today, there are manufacturers popping up in every part of the world, most importantly China, offering similar hardware at less that half the price. The number of ways to build a different device to the competition is being reduced, but one core way remains: the software experience.

The rise of the Chinese OEMs has been a clear sign for Samsung, that it can not maintain its smartphone leadership based solely on hardware. We have seen Samsung investing a considerable sum into developing its own software platform, first with Bada, which has been evolved into Tizen. Samsung is still pouring millions into the platform; it has recently announced it is to support Tizen game developers with up to $1 million a month for the most downloaded titles (through payments of $100,000 per developer).

Hardcore Android fans might disagree, but Samsung made Android popular. And now that every other phone is running Android, Samsung might have looked back and wondered what if it had taken some time to create a competitive enough software back then. Perhaps that is why, Samsung opted out of the Android wear platform, and started making Smartwatches based on Tizen OS. The OS switch hasn’t affected the sales one bit and now Tizen has a home in the Internet-of-Things arena with Samsung’s home appliances.

A Samsung Galaxy sign is seen at the Samsung Galaxy Unpacked 2015 event in New York

The industry is particularly interested to see what impact switching towards software will make for Samsung’s smartphone business, especially from the device hardware perspective. It is possible that the business has tried too hard – witness the battery failures of the Samsung Galaxy Note 7, which may be a rushed product in the interests of competition. This could encourage the company to slow down the hardware development and concentrate on improving and refining its software.

And we have seen Samsung repeatedly say over the last couple of years that it will be paying more attention to the software rather than the hardware. We are seeing these signs, too. TouchWiz has been refined and smoothed over into Grace UX, with a cleaner, simpler and less cluttered look and feel. Even some of the recent acquisitions by Samsung have a more software side to them than hardware.

Samsung acquired Viv labs and is now developing its own AI Assistant now, which if even at par with the competition from the likes of Google, Apple and Microsoft will have an inherent advantage, Samsung makes almost everything you use in your home, and you may not need a Samsung Home in every corner of your house to access this AI assistant.

On November 14, Samsung acquired Haman, a US audio company, which has significant experience in designing and integrating sophisticated in-car technologies judging that infotainment systems will play the most important role as “brains” in an era of autonomous vehicles and connected cars in the future.

Samsung’s latest acquisition is NewNet Canada which owns a next generation mobile messengerwhich supports RCS (rich communications services). This could mean that every Samsung phone user around the world can send large-size photos and videos via RCS and enable a group chat service.

Samsung has previously tried its hand at software when it launched Bada OS in 2009, and it tanked under the two-sided pressure from iOS and Android. But today’s Samsung is different and perhaps more experienced in the field than it was in 2009. Last year was important for Samsung, because with the Galaxy S6 family, Samsung proved it could still produce industry leading hardware. It will be interesting to see if Samsung can repeat that in software.

Thoughts?

Via : Business Korea

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