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Samsung vs. Google: an Interview with Rafael Barbosa Barifouse of Redacao Epoca

On Mar 18, 2013, Rafael Barbosa Barifouse – Redacao Epoca – Editora Globo asked (and I answered):

Q: Why is Samsung creating Tizen?

A: I believe they are collaborating on Tizen development because they want an alternative to Android and because Bada was not good enough to meet that goal. Tizen’s roots include contributions from Intel, Nokia and several Japanese companies so it’s not Samsung’s OS per se. Historically it was the “open” alternative operating system for embedded and mobile systems. See https://github.com/kumadasu/tizen-history/blob/master/tizen-history.pdf for a historic perspective.

In some ways Tizen seems to be a blend of several pieces of code including proprietary Samsung user interfaces. Samsung is presumably interested in having a unique, differentiated experience. This is something every device maker seeks. Put another way, if they did not seek this then it’s unlikely that they would be profitable which would also imply that they would not invest in marketing and development of products. As Samsung invests both in marketing and development it can be concluded that they seek to offer a unique value proposition and, in today’s market, that means a unique experience.

Does it make sense to create a new mobile OS when it has had so much success with Android?

Samsung would argue that the success it’s had is not due to Android but to its products. Arguably they are right because if Android were the valuable component in a phone then buyers would buy the absolute cheapest device that runs Android regardless of brand. That is not the case. People still seek out a particular brand of phone because of the promise it offers. Consumers have been buying more Galaxies than no-name Android phones.

Why is Samsung the most successful company between the Android devices makers?

In my opinion it’s due to three reasons:

  1. Distribution. Success in the phone business depends in having a relationship with a large number of operators. Samsung had these relationships prior to becoming a smartphone vendor [because it sold all other kinds of phones]. Few alternative Android vendors have the level of distribution Samsung has. For comparison Apple has less than half the distribution level of Samsung and most other vendors have less than Apple.
  2. Marketing and promotion. Samsung Electronics spent nearly $12 billion in 2012 on marketing expenses of which $4 billion (est.) was on advertising. Few Android vendors (or any other company) has the resources to match this level of marketing. For comparison, Apple’s 2012 advertising spending was one quarter of Samsung’s.
  3. Supply chain. Samsung can supply the market in large quantities. This is partly due to having their own semiconductor production facilities. Those facilities were in a large part built using Apple contract revenues over the years they supplied iPhone, iPad and iPod components. No Android competitors (except for LG perhaps) had either the capacity to produce components or the signal well in advance to enter the market in volume as Samsung did by being an iPhone supplier.

Tizen was being treated as an OS for low and mid level devices, but recently Samsung said that it will launch a high-end device with Tizen on Q3, an area where it’s very successful with Android. What has changed? What does this announcement mean?

Planning for these product launches is done a few years prior to launch. I believe alternatives to the Android line (i.e. Galaxy) have been planned for a long time. Note that Samsung also has a line of Windows Phones and historically has supported Bada, Windows Mobile, Symbian, PalmOS and LiMo smartphone platforms. Samsung’s involvement with Android is only about three years old, and arguably only enjoyed two years of prominent growth. That’s less than one product launch cycle and far less than a platform or OS development cycle.

I believe the company has a long term perspective and that includes a time span beyond the likely lifetime of Android [Note that platforms do have finite lives]. Keep in mind that phones last less than two years. If users are not loyal to a platform then they will very quickly move on. The “stickyness” of a platform depends on media or software consumption by the user. That level of consumption is not particularly high for most Android users. The same phenomenon happened with Symbian and BlackBerry and Windows Mobile users. Hundreds of millions switched or will switch out of those platforms. This happens far less with iOS, Mac OS X and Windows because of the significant investments users make in the ecosystems above the OS.

Is Google dependent on Samsung’s sucess with Android? Or Samsung is more dependent on Android since its the most popular mobile OS nowadays?

Google is not dependent on Samsung because it’s not dependent on Android. Samsung is not dependent on Google because Samsung is not dependent on Android. Android is valuable in theory but in practice its value is hard to identify. Historically it was planned as a defense against the hegemony of Windows, BlackBerry and iOS. In that respect it has succeeded. But playing defense is not enough to win a game. For Google to truly succeed in mobile it needs to define a better business model.

So far its profitability from mobile is very weak and has not shown up in the bottom line. Furthermore, it’s probable that Google has ‘control’ over only about 40% of Android devices in use. Control here means a guarantee that users will use those devices for the benefit of Google, and, more importantly, not for the benefit of its competitors.

You can also think of it this way: If they “divorced” there would be minimal to no impact to their fortunes in the foreseeable future. Buyers of Samsung phones will still buy Samsung phones because they will look and feel very similar and Google services will still be available through browsers or apps (e.g. Google maps on iOS). Conversely, users of Google services will continue to use them because they will be available on Samsung devices, no matter what OS is running. The services Google offers are independent of Android and are cross-platform. They will make sure they are available on all major platforms (as they were before and during Android). Google is far more loyal to Search and Maps and Gmail and YouTube than they are to Android.

Do you think Google is going to merge Android with Chrome OS?

Google’s chairman said they would so I assume they will.

If so, how this could make an impact on Samsung?

It depends on how the new OS would enforce licensing terms. If the result would be a restriction on Samsung services like S Pen, AdHub, Samsung Wallet, SmartTV, ChatON etc. then Samsung might reject the OS and either fork Android or move to Tizen more broadly.

  • obarthelemy

    Maybe Samsung is having success mainly because of the devices themselves ? Not the brand, not the distribution, not the marketing&promotions, not the supply chain (which are the 4 “reasons” listed in the article).

    Samsung’s products
    - are not horrendously expensive for 1st-tier,
    - make the bold choice of sacrificing looks for price, features, weight and resilience… which people seem to like
    - have been mostly keeping true to the basics: SD slot, removable battery, good to excellent camera…
    - offer a few extras or differences: AMOLED, pen for the Note series, large size (they have been the trandsetter there, both with the Note series and with the S series), dlna client and server from the get-go…

    Of course, running a lot of ads, having permanent promotions (I think that’s a country decision, depending on what works, in France, there’s 10-20% refunds quasi-permanently, starting 2 weeks after launch, if that), controlling the components, … helps. But without a good product, it would amount to nothing.

    Maybe people just like the product. Not the brand, the actual device ?

    • Walt French

      All well and good to cite the positive features as you do. But look at the HTC One—nice specs but HTC is having trouble getting parts and therefore getting them in front of consumers.

      Horace’s points address a fuller spectrum of what running a multi-billion dollar tech firm is all about.

      Oh, and BTW: Samsung has indeed made a major commitment to AMOLED but it’s hardly a Jesus Technology—while the S4 has a very detailed screen, other AMOLED screens have poor resolution (fuzzy text) and Samsung has shipped a lot of displays that have garish colors and less than great brightness and/or battery life. It’s a feature, all right, but not one that everybody worships.

      • obarthelemy

        True about AMOLED, and I’ve said so repeatedly here: the colors are iffy (great for text, not so much for pics and vids), and Pentile can be an issue at lower resolutions (below 250-ish dpi). Not so sure about brightness and battery life, I’ve read the opposite. Huge advantage is true blacks, and very low power consumption if (like I do) you prefer a light-on-dark color scheme.

        HTC could have alleviated logistics issues by going for an easier casing and a more mainstream camera. Their problems come from logistics, but also design.

      • JohnDoey

        Pentile is always an issue. All photos and video and graphics are RGB, not Pentile. It is a cheap hack that is not worth it. A lower-res RGB screen that costs the same will look better in every case, but you can’t lie in the spec sheet and claim 250 dpi.

      • JohnDoey

        Almost nobody buys a Samsung to get AMOLED, which has awful color. They buy Samsung because it is cheap and plentiful and the ads are in your face constantly.

    • http://www.noisetech-software.com/Home.html Steven Noyes

      I think it is more brand. Their cameras, for example, are OK to good and not good to excellent. The AMOLED screens exhibit horrible color (though they are punchy in their colors and many people mistake that as a good thing) and most are Pentile based with poor outside visibility (though getting better every generation)

      Likewise, the Galaxy S III and Note series have done poorly on various drop tests along the web (I suspect the larger screen sizes make these tests harder and harder to “pass”) so resilience is not really an option as well.

      In all, Samsung makes a good phone. So does HTC (and I think the new HTC One is brilliant). Sony makes some great phones. Samsung markets the heck out of theirs and there is little question of the effectiveness. The results speak for themselves. Likewise, Samsung in on hundreds of carriers. I think they are on 2X more carriers than Apple and only Nokia might challenge them on that part of the distribution line.

      • obarthelemy

        At launch, the S3′s camera was deemed better than or at par with the (then current) iP4s: http://mashable.com/2012/09/30/smartphone-camera-shootout/

        Amoled is slightly inferior overall to the best LCDs for all-around use (http://www.displaymate.com/Smartphone_ShootOut_2.htm#Table). Funny thing, the results are reversed if you do the smart/ergonomic thing and use light-on-dark for text. Easier on the eyes, on the battery, and more readable.

        Again, the ability to be on hundreds of carriers is also due to making choices that ensure the devices are easy to make. Casings will never be an issue ^^

      • http://www.noisetech-software.com/Home.html Steven Noyes

        Light on Dark does not impact the horrible color balance of Samsung displays. The displaymate article simply confirms what I said:

        “Good Images
        Photos and Videos
        have too much color
        and accurate contrast”

        The colors on Samsung’s displays are simply horrid (yes, color accuracy is very important to me since I use these things [iPad/iPhone] to edit images in the field).

      • JohnDoey

        I’m a graphics pro and I can tell you, AMOLED is not better in any way. RGB color is not as simple as most people think. You can say rgb(255,0,0) and it means “turn on all the red pixels and turn off all the green and blue,” but that does not produce the same color on any 2 different screens. The operating system has to intimately know the characteristics of the particular screen it is using so that it can constantly convert the colors to compensate for the screen. AMOLED screens change over time, so it is not possible to manage their color.

        Of course, iOS is the only mobile system that manages color spaces, but even if Android did manage color, AMOLED would make that moot. It won’t retain its factory color as time goes on.

      • obarthelemy
      • http://www.noisetech-software.com/Home.html Steven Noyes

        The 4S slaughtered the GS3 in that test in field flatness, sharpness and color accuracy. Don’t even get me started at the way over-sharpened aspect of the GS3. As I said, OK to Good. The iP4S and IP5 I rate as only good. The best Nokia camera phone I rate in the Excellent.

        Samsung has, at best, had only “good” level cameras (at best) in their cell phones.

        Apple started with poor in the iPhone, 3G and 3Gs. With the iPhone 4 they went to almost excellent but their incremental updates have put them down to the “good” category with the 5.

    • poke

      It’s a question of success relative to other manufacturers. What makes Samsung’s products better than HTC, Motorola, Sony, LG, etc? Of the items you list I think only the last applies. But other manufacturers also tried styluses and other features to differentiate themselves. Maybe Samsung was onto something with phablets, but a lot of their sales are normal sized phones.

      • JohnDoey

        HTC is having supply-chain issues and HTC does not sell in nearly the same number of locations as Samsung.

        Where Samsung and Apple compete, Apple wins by a long shot, even without a low-end device. But Apple is absent from about half the markets because they are the newest phone maker. Huge advantage for Samsung. Where a carrier doesn’t carry iPhone, Galaxy *is* the iPhone.

      • obarthelemy

        The other active digitizer gizmos all had significant drawbacks: the HTC Flyer was horrendously expensive, the Lenovo Thinkpad Tablet too, neither had convincing software… Motion Computing and Fujitsu never left the Pro segment. The x86 tablets (Asus EP121, HP Slate) suffered from the usual x86 issues: Windows, battery (3hrs for the Asus), power (the Atom-equipped HP), lack of touch software.

        Quick comparison:
        HTC one is $100 more, no SD, fixed battery
        Moto: could not find an equivalent model
        Sony: Xperia Z is OK, $70 more, weak camera, fixed battery, but SD slot.
        LG: the Optimus G is low-rez, no SD, fixed battery.

        My take is that apart from looks (HTC and Sony look especially nice), the alternatives don’t offer anything more, nor anything different for that matter, and take away valuable flexibility (SD and removable battery). And cost more.

        I’ll be looking at alternatives to the GNote 3 later this year, but I’m expecting to find the stuff from Acer, ZTE, Huawei, even maybe BLU more competitive that shiny stuff that fails at the basics (like having room for a few hundred songs and a choice of movies and series, plane rides are booooring ^^)

    • handleym

      It depends what you are interested in.

      If you are interested in the world having access to adequate computing/communication devices (and this is a fine and noble interest) then what Samsung is doing is interesting. It’s a fantastic thing that some teenager in Vietnam is now able to afford a more-or-less real computer, and it’s Samsung that is feeding this, not Apple.

      If you are interested in where the money is flowing and how to invest, what Samsung is doing is slightly less interesting. They’re making a small amount of money per device on lots of devices, and there isn’t much room to grow this. They have no demonstrated ability to add novel revenue-raising services or products, only a demonstrated ability to copy existing such services or products, but making substantially less profit.

      If you’re interested in the future of technology, what Samsung’s doing is extremely uninteresting. The demonstrated ability here is honestly of nothing but obvious extensions of what has already been done — replace dual-core with quad-core, but nothing innovative in either programming model or supplied apps to make those quad-cores useful; add a stylus but do nothing with the stylus that wasn’t being done by Palm 20 years ago; and so on.

      • obarthelemy

        Broadly true, but that’s broadly true of *everyone* in this business: the true innovators were Palm, everything after them has only been incremental.

        Worst thing is, I distinctly remember them telling their resellers (I was one) that Phones were next, yet they kinda missed the boat.

      • JohnDoey

        No, Palm does not deserve all the credit. Palm started out as a Newton app maker. The mobile ARM architecture was co-created by Apple for the Newton. Newton had Mac/PC sync, touch, modem, apps. All PDA/smartphones descend from Newton. Palm certainly did their part, but they don’t get all the credit.

      • obarthelemy

        No. Palm started independently of Apple. Arm too. Lots of devices had your listed features before Newton, which just added flaky handwriting recognition.

      • Space Gorilla

        So which is it, “the true innovators were Palm” or “Lots of devices had your listed features before Newton”. You can’t have it both ways, since Palm was founded in 1992 and development of the Newton started in the late 80s.

      • http://www.facebook.com/publiclee Lee Rydstrand

        Not quite. Palm was a software only startup that provided the Newton with its handwriting recognition software, Graffiti. When Newton failed they went on to produce the Palm themselves. IMHO General Magic is the precursor to smartphones – they had Mary long before Siri. http://www.forbes.com/sites/michaelkanellos/2011/09/18/general-magic-the-most-important-dead-company-in-silicon-valley/

        BTW anyone notice Andy Rubin’s trajectory?

      • Huxley

        General Magic was an Apple spin-off

      • http://loewald.com/ Tonio Loewald

        You obviously never used a gen 2 or later newton.

      • Huxley

        ARM was a co-venture of Acorn, VLSI and Apple. The Acorn RISC Machine did predate but was used for desktops, the first mobile use was the Newton.

      • http://loewald.com/ Tonio Loewald

        Palm did not start as a newton app maker. Palm started as a group of disgrunted apple employees whose 68000-based PDA proposal was dropped in favor of ARM-based Newton.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        The Newton, the innovator that Palm was heavily inspired by, predates Palm’s offering. In fact Palm survived by doing Newton software for a bit after their first failure in PDAs.

        You really think Apple has brought nothing to the tech table, don’t you? You know very little about iOS and less about Apple’s history and products.

    • Tatil_S

      ” make the bold choice of sacrificing looks for price, features, weight and resilience…”

      Sacrificing looks and design for one reason or another is what the computing industry has been doing for two decades now. When did that become a “bold” choice?

    • JohnDoey

      Those features are all super-generic, they are available on hundreds of devices other than Samsung.

      What makes Samsung stand out from the crowd is they are in all the markets because they have been selling phones a long time, they spend much more on marketing than you would expect, and they make components, so they never have supply chain issues.

      iPhone also sells because if its unique features. Nobody says, “I want ARM architecture so I bought an iPhone.”

      • obarthelemy

        “Those features are all super-generic, they are available on hundreds of devices other than Samsung”. Which ones ? From 1st-tier OEMs, broadly equivalent size (say, 4.3″ to 5″).

    • simon

      All your reasons applies to Nokia’s Symbian phones. It’s a wonder why Symbian hasn’t succeeded since it fulfills almost all of your criteria.

      Of course the bigger problem with your claims mostly do not corroborate all that well with real world evidence where Android users are less likely to use the phones for smartphones features.

  • http://www.isophist.com/ Emilio Orione

    The stickiness part has made me wonder for sometime.

    How will Android fight the next platform? Tizen maybe or the next one with vocal integration and new devices or whatever will be.

    iOS has users that have invested in the platform, Android does not.

    iOS has a stronger brand (because Samsung is the winning brand more than Android) and customer satisfaction.

    Even if it want be Apple to guide the next thing (but I guess the odds are more toward Apple than Samsung) iOS users will change more slowly giving to Apple the time to upgrade.

    A lot of Android customer are going for the lower price, but the cream, the spending customers will have less burden to change.

    Perhaps the integration with chrome is a good idea at this time, leverage the Android popularity now that is high to make Chrome succeed and be ready to abandon Android when it will be surpassed without regrets.

    • obarthelemy

      Android can fight with features and being better.

      I know that’s an unpopular discourse in these Apple-leaning parts, but some, maybe most users actually want a phone that does things, not just a phone that looks cool. I have difficulty imagining myself using a phone or tablet without widgets, good alerts and toggles in the status bar, a choice of keyboards and browsers (one in day mode, one in night mode, and Opera Mini for when there’s no 3G), background synching…

      And I also need good apps. Last I counted, I use about 25, of which 15 are critical, they took a while to get to Android and will probably take even longer to get to other OSes, if at all.

      And I need a widely-adopted ecosystem that won’t cost me all my apps if I want to switch brands.

      No other OS than Android provides all of that. Actually, many don’t provide *any* of that.

      • Kizedek

        Oh, Bart, Bart, Bart,

        This is not the unpopular discourse in these parts:
        “Android can fight with features and being better.”

        This is the unpopular discourse in these parts:
        “maybe most users actually want a phone that does things, not just a phone that looks cool.”

        It is your little back-handed stabs, after kinda-somewhat making a bit of a point that kinda-almost makes a little sense. Then you coming back and acting all pained and innocent.

      • Flexxer

        Especially as real world usage statistics (web browsing, app developer income etc.) show that iOS users on average “do” a hell of a lot more with their devices than Android users…

      • JohnDoey

        The reason your theories are unpopular is they are not supported by the facts. This is a fact-leaning blog, not an Apple-leaning blog.

      • Space Gorilla

        “maybe most users actually want a phone that does things, not just a phone that looks cool” – Well, if we look at usage data, from many sources, we find that it is Android users that are buying phones and not doing much with them. Recent enterprise numbers would also disagree with your distorted view of reality, iOS is dominating.

      • Johnny

        I don’t want to offend you, but sometimes you are the contrarian here. I actually appreciate the majority of you posts though, for your different point of views.

        This website focuses on the mobile industry thru an “Apple” lens bc Apple has achieved unforeseen* success in the past decade, and also bc Apple discloses more Sales and Financial info than most of their competitors.

        My sincere question, for you, is there any Android, Microsoft etc… – leaning websites that use actual data and facts to analyzed the mobile computing?

        I’m looking for them but haven’t seen any yet.

      • vincent_rice

        Oh FFS, you were doing so well for a while there, being all rational and whatnot;

        and then this…

  • http://www.noisetech-software.com/Home.html Steven Noyes

    I don’t think the aspect of the Samsung’s supply chain can be understated. The new NTC One is, IMO, the nicest Android phone released to date (though it is a bit big for me still). It is beautifully designed and really seems to put a correct emphasis on the right parts. For example, the camera did not go for MP it went for outright quality.

    In doing this, however, HTC had to venture into custom parts and now, because they have a weak supply chain rating, are not considered a tier one player and have been forced to delay the launch a bit.

  • The Self-Hating Android

    It’s misleading in this context to talk about the average Android user vs. the average iOS user. Samsung’s flagship phones cost the same in the U.S as an iPhone — $200 under contract. That’s a minority of Samsung’s sales, but those customers are especially lucrative. They may not be as sophisticated as iPhone buyers, but the difference is likely to be much smaller than for Android generally. If anyone is buying Android apps, using Google’s ecosystem, etc., it’s them.

    Now imagine Samsung forks Android next year when it releases the S5. If you upgrade, you lose all your Play Store apps, there’s no native Gmail or Youtube app, and instead of Google Maps, Samsung gives you its new S Maps Extreme Edition Powered by Mapquest. The average Android customer might not care, but the average S5 buyer will. There are things Samsung could do to mitigate the problem, but I think you’re kidding yourself to say there would be “minimal to no impact” on Samsung’s fortunes.

    You suggest this wouldn’t be an issue because Google cares much more about its core businesses than it does about Android. But Google hasn’t released apps for the Kindle Fire, and Amazon has sold a lot of those. Losing Samsung would be catastrophic for Android. I suspect Google would release apps for Samsung only reluctantly, if it became clear that Samsung had already won.

    It’s overstating things to call this dynamic mutually assured destruction, but I suspect it will keep Google and Samsung together longer than you expect.

    • Space Gorilla

      It depends how many apps Samsung has ready in its own store once it switches to a fork of Android. As you point out, this will only affect a small portion of their customers. It might not be that much of a hit. Samsung is never going to catch Apple on profit share, so does it matter where they end up in profit share as long as they’re still a solid second? Long term they want to copy Apple’s ecosystem and vertical integration, and forking Android seems necessary at some point. As obarthelemy said, “I also need good apps. Last I counted, I use about 25, of which 15 are critical”. That’s not a lot of apps, and if we look at usage data, the average Android user doesn’t have huge app needs. That should change over time, but my point is Samsung does have some breathing room to create an app ecosystem. Sooner would be better than later to switch to their own fork of Android.

      • The Self-Hating Android

        You have a good point about Samsung’s long-term plans, and they may figure that the longer they wait, the more painful it will be.

        But I still think it’s important to acknowledge that a jump will be painful. With enough cajoling, Samsung should be able to get most big developers to create Samsung-specific apps in time for launch, but probably not all of them, and the transition wouldn’t be seamless. 15-25 crucial apps sounds about right for me as well. But (I imagine this is typical for most flagship Android phone customers) several of those are Google apps. And unlike Horace, I don’t think Google will go running to create new versions of its apps for Samsung.

        Samsung would have to convince its best customers to go through an annoying process to replace key apps and switch over to new ones, as the price of a new Galaxy phone. Meanwhile, Sony, HTC, and LG will be selling phones that are almost identical but don’t require a similar level of pain. The media would go crazy over this — look what happened to Apple over a single maps app. And I don’t know that Samsung is currently capable of creating its own basic apps at the level of Apple or Google. Look at “S Voice” vs. Siri or Google Now.

        Maybe Samsung feels that’s a Band-Aid that needs to be ripped off, but I wouldn’t be looking forward to it.

      • Space Gorilla

        “look what happened to Apple over a single maps app”. Well, if we look at sales, the answer is pretty much nothing happened to Apple. I would argue that Samsung can create a better/easier/unified target for developers. The real question is if Samsung forked, can Google afford to not be on Samsung? If Google is cut out of Samsung *and* Apple, that’s a big slice of the mobile pie, and Google is already having trouble making money from mobile, which is the future of computing. Google has to be where the mobile users are, and that’s Apple and Samsung right now.

      • The Self-Hating Android

        I was referring to Apple maps as an example of a media firestorm. I’m not sure it’s very instructive in terms of the sales hit Samsung would face: Apple was supply-constrained and probably would have sold about as many iPhones regardless. I’m not aware of any way to figure out how many people decided not to buy an iPhone initially because of the maps situation. In any case, Samsung customers are likely less loyal than Apple’s, would have closer alternatives, and would face a much greater inconvenience if they couldn’t use any of their Google apps.

        In the long run, no, Google can’t afford to be excluded from Samsung phones. But for six months or a year, to make Samsung suffer and try to gain an advantage for their own phones?

        I think you’re right that Samsung could become a better target for developers, and if they want to keep competitors at bay, there’d be no better way than to convince developers that it’s worth creating apps for Samsung, but not for the Play Store. But that’s a tough trick to pull off.

  • http://twitter.com/portfolio14 John

    Lets do a thought experiment:

    If Samsung today offers both Galaxy S4 Android and Galaxy S4 Tizen, at the same price and with the same hardware and stack of apps, how will buyers select between the two?

    I reckon people will gravitate towards Android because of its known quality and availability of apps.

    If so, how can we argue that Android isn’t sticky?

    • http://www.noisetech-software.com/Home.html Steven Noyes

      But that is not the question is it? What if the GS5 is a Tizen based system and HTC releases a refresh of the HTC One. Which would sell more units?

      • http://twitter.com/bennomatic bennomatic

        Or alternately, Samsung could invest in Tizen by putting it only on its lowest-cost phones to establish some level of brand identity and loyalty, forgoing the profits for a time. Then eventually, they would “finally” release a flagship product with the Tizen OS and get all the excited upgraders. Then, they could slow down the upgrade cycle for the Android-laden Galaxy S* series, making Android appear to be lagging while still keeping pressure on all the other Android-based phone manufacturers.

        They’ve got money, and money means they have time. Since Samsung is the number one name in Android phones, they could control a perception war against Android if they saw fit. Hell, I think their ads portraying iOS users as old and stodgy are pretty silly, but some people totally buy into it; with a more subtle approach (“That was yesterday… Tizen is tomorrow!”) I’ll bet they could make your average person think about Android on phones the way they think of Linux on the desktop.

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  • handleym

    Horace looks at this from the point of view of a manager. I’d consider things from the point of view of an engineer.
    Code is HARD. Really HARD. REALLY REALLY REALLY HARD.

    There is no company I can think of for which I think of their software products in glowing terms — they took a difficult problem, and they solved it so well. The best we have is a few companies for which I often think that (punctuated by frequent periods of “God freaking dammit! Get your act together and ship something that works!”). Google for search (but not a lot of other stuff), Apple obviously has its stuff that works, but so so much that doesn’t, from jerks in Safari to power management in 10.7 and 10.8 to the horribly less powerful UI in iTunes 11 to large swathes of iCloud.

    [The single best company, IMHO, is one few have dealt with, Wolfram for huge amounts of Mathematica (but their export-to-PDF code sucks, and even Mathematica can randomly quit because it has mismanaged its memory and run out).]

    For Samsung to do well by differentiation in SW, it needs to perform on the level of Google, Amazon, Apple, MS. (We might complain about how low a bar that is when bitching, but seriously, this stuff is hard, and they’re all operating at state of the art.) Do we have reason to believe that they can do so? Getting the bare basics is easy — you can grab a Linux kernel and UI toolkit off the net — but even the next step beyond that — device drivers that mostly work, and power management — is a hard problem that has defeated many companies (and continues to tax even the best).
    To go further you need a vision of how to structure you APIs and frameworks, a non-trivial task, especially when you want to add new functionality that hasn’t been seen before, so don’t have earlier models to work from.
    You need to provide a compelling dev environment.
    You now need to provide a services backend (which means not just the physical data centers, and the code to run them, and the management, and the security; but also the APIs and client code to make them useful). Soon enough you’re going to have to include more and more forms of AI and machine learning.

    Samsung has no demonstrated capability today in pretty much any of this. What they have offered up is hardly beloved (their Android skins) and is generally considered to be slow, clumsy, poorly thought out, and with no concern for the difficult issues, like forward and backward compatibility, that so trouble the professionals.

    PERHAPS they can buy talent? (Who would have thought Apple could buy CPU design and get it up to speed so fast? And there is a mild precedent perhaps in MS’ essentially buying up the brains behind NT.) But there are so many tricky issues: do the purchase become part of Samsung and run by Samsung with Samsung culture? Do they move to Korea, or does Samsung “admit” that the most important future part of their company will be based on English, in the US (which seems difficult politically)?

    I understand why Samsung can want this. What I’m not sure about is that they can deliver on that desire.
    (A parallel, which Horace may know a lot about, would be the gap between what Nokia wanted with Symbian [and its various other pre-WinPhone dalliances] and what they could ever actually deliver.)

    • JohnDoey

      All software has bugs. So what? But all software is not created equal. Apple’s operating system and application software is significantly better than their competitors. Part of it is the heritage (iOS and App Store are based on decades of Mac, NeXT, and iTunes) and part of it is hardware integration and part of it is their unique focus on building what the actual end user needs. Apple’s products are better.

      You could also say, “all devices can be accidentally dropped and broken.” So what? The Apple devices are better.

      • http://twitter.com/bennomatic bennomatic

        I think the GP’s point (while admittedly muddled) was that in the best-case scenario, a Samsung-grown OS would have problems, just like iOS and Android, but that their level of software talent is not anywhere near Apple’s or Google’s. Thus, rather than trying to say ‘Apple sucks’, or even ‘everything sucks’, I am pretty sure he was trying to say, ‘Tizen is really, really going to suck. It is going to have all of the problems that Apple and Google haven’t solved, and a lot of problems that they have solved.’

      • Nevermark

        handleym is correct. Software development gets treated by analysts like it was just some other component in the mix. But while hardware advances can five companies short term competitive advantages, most of those advantages level out or become irrelevant quickly as components are completely replaced in new models. But software accumulates and so is the long hard play.

        Bad software design decisions from five years ago often derail new advances. The details are rarely discussed, but the software delays and instability that plague losers (Blackberry) are the visible result of this.

        Apple had decades worth of good software design behind iOS (i.e. NextStep >> Mac OS >> iOS), and Google (quite amazingly in my view) was able to quickly repurpose other long term software assets to create an iOS level OS. Microsoft’s mobile software efforts failed spectacularly several times until their recent (perhaps) comeback and who knows software better than they did no so long ago?

        Samsung’s market success, hardware knowledge, and deep pockets, do not eliminate the enormous risk they will be taking if they try and migrate away from Android to something they must develop independently going forward.

        However, if they succeed (against the odds in my opinion) in transitioning customers to their own software they will have even more end-to-end design and build capability than Apple and be very difficult to knock of their perch.

      • Discit

        Well, google is slick. However they built on an open source code base like Linux, using other people’s work for free so that gives Samsung the ability to build from that. It will feed true innovation I think to see what Samsung can do freed from Google’s restrictions, like the one the Skyhook showed preventing them from even contributing code to non approved android devices.

        http://www.theverge.com/2011/05/12/google-android-skyhook-lawsuit-motorola-samsung/#7 – “it’s gone so far as to forbidding Samsung from producing or even contributing software to unapproved devices.”

        Given that environment, divorcing itself from google’s lock-in agreements is probably the only way we can see if Samsung can innovate, without worrying if they’re infringing on the google proprietary spyware layers or somehow contributing code to “disapproved” devices.

  • Luid Masanti

    quote:

    “Why is Samsung the most successful company between the Android devices makers?

    In my opinion it’s due to three reasons:”

    Isn’t “copying Apple’s designs” one more reason?

    • http://twitter.com/MaxArt2501 MaxArt

      Nope. Many other producers “copied Apple” no less than Samsung did.
      But none of them were as successful.

      On the other hand, ond of the most successful handset in 2010 before the Galaxy S came out was the HTC Desire, which has a design quite different from the iPhone.

  • francois

    Like usual, a great insight. I’d say Asymco is looking from the analyst point of view, not manager.

    As for the Google comparison, I don’t think Samsung or Apple may compare to Google for many reasons. For example, both Facebook and Google tried the Foursquare way withtout success. Even with huge market access, you can’t always copy what is upcoming.

    Another sample is like you say, Google trying to make physical products, it can’t work withtout a huge marketing and it’s not like they can rocket launch, even with 115k employees world-wide.

    Regards,

  • http://www.facebook.com/francoisprigent François Prigent

    Anyways, Samsung strategy is VERY clear, VOLUME vs VALUE. They even said it on french TV talking about iphone.

  • http://www.facebook.com/francoisprigent François Prigent

    Goal is to overwhelm market with a range of copycats phones.

  • http://www.facebook.com/francoisprigent François Prigent

    Well, I don’t know for the US but in EU Samsung is in a copycat and multiplying low cost models like S3. In the end, I don’t think this battle will be about the best phone, but how much will it cost for a decent phone. At least that’s what Samsung does here in retail. Apart from that, of course it’s not a hardware-only battle. For example, Blackberry CEO did achieve his expectations. So all cards are open.

  • obarthelemy

    Another “analyst” who doesn’t realize that when people buy devices, one of the key deciders is.. the device.Samsung sell lot of devices also, or mostly, because their devices are good and cheap. Other companies have or had wide distribution, large marketing budgets, and a supply chain? Yet they floundered, and let Samsung thrive.

    The “40%” claim is misleading to the point of being a fabricated attack. Samsung include all of Google’s goodies, and so do many Chinese phones and tablets.

    That guy obviously has an agenda, which is OK, but almost reaches Fox News like levels of “information massagin” (i.e., lying and intellectual dishonesty), which makes his analysis basically worthless.

  • Discit

    Not so sure google isn’t dependent on android. Android feeds google’s revenues in that all the information it collects in the background on people makes their desktop ads more valuable. That spyware depends on google tightly controlling any “true android” device via various agreements and restrictions to not replace their spyware layer it seems from their strong reaction against skyhook, showing how much they control what devices run “real android” behind the scenes and what partners can replace, in addition to controlling the “open source android” development team to leave out core functionality, leading most to reinstall the google apps if they want a reals smartphone. – http://www.theverge.com/2011/05/12/google-android-skyhook-lawsuit-motorola-samsung/
    Any company diverging from the “true android” frees themselves to replace the google spyware layer or not, at their discretion.

    Didn’t google first state they would use android to sniff nearby wifis of users to replace that function of their google cars, something I imagine also feeds to their bottom line? They have a lot of money riding on the background spyware services of the “real” android devices it seems. If companies start forking in ways that replace the system level spyware layers you can bet they will react because that seems the whole point of android.

  • DesDizzy

    This is a link to a very interesting Apple analytical piece from Goldman Sachs that fellow Asymco contributors might find of interest.

    http://www.technologyinvestor.com/wp-content/uploads/2012/12/AAPL-by-Goldman-Sachs.pdf

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