Samsung Electronics (Samsung) is a prominent player in the Smartphone industry in terms of production and sales. The company’s flagship Galaxy S brand of mobile devices has enabled it to maintain a comparative and competitive advantage. In essence, Samsung sold more smartphones in 2013 than Apple. Nonetheless, the dynamic and volatile nature of the mobile telecommunications industry has placed Samsung in a precarious position. In essence, Samsung has to make a difficult choice of either sustaining the dependence on Google-owned Android operating system (OS) or developing an autonomous ecosystem. Despite the inherent challenges, Samsung will have more control if it develops an independent OS for its mobile devices and applications.
The Smartphone industry has experienced unprecedented developments within the past decade. Samsung and Apple have dominated the telecommunication market with their innovative products. Conversely, rapid technological advances and the increasing demand for smartphones have facilitated the penetration of new entrants in the industry. For instance, Microsoft’s Windows 8 phones are gaining traction in the mobile segment, although they do not pose a significant threat to the dominant players. It is imperative for Samsung to take advantage of its technical capacity to develop an independent OS. The primary concern is that Samsung’s overreliance on Android OS is neither productive nor feasible.
The fundamental issue is that key players in the Smartphone segment have developed independent operating systems for their mobile applications. Apple, Samsung’s fiercest competitor, has exclusive control over its hardware and software. On the other hand, Microsoft and Blackberry have also developed self-regulating ecosystems. The foremost benefit of having an independent ecosystem is that companies can control the development of smartphones, as well as the distribution of advertising revenues. Samsung’s continuous use of the Android OS means that the company cannot demand a considerable share of advertising revenues. The problem encountered by Samsung is that it has limited power over the Android OS, which is hampering production and expansion capacity.
Samsung has often waited for Google to develop the succeeding generation of the Android OS prior to releasing a new line of smartphones and tablets. In contrast, Apple has not experienced this challenge because it controls its software and hardware. The issue is that the reliance on Google has weakened Samsung’s production capacity. Another problem confronting Samsung is that Google has shown interest in the Smartphone industry. Although Google sold Motorola to Lenovo, the intention to acquire a company dealing in mobile devices is a pointer toward a potential threat in case Google decides to shift its priorities. Samsung should formulate a strategic plan to control its hardware and software through an independent ecosystem.
The first solution for Samsung is to abandon the Android OS and focus on modeling an independent ecosystem. The company’s affiliation with Tizen, an open-source OS, is a fundamental starting point. The Tizen OS will allow Samsung to control the OS aspects and hardware of its mobile products. Conversely, a radical decision of this magnitude portends numerous limitations for the company. First, the development of a novel OS will require massive financial resources and considerable time. Second, the widespread popularity of the Android OS will make such a move both impractical and unwise. Consequently, the construction of a sophisticated OS will slow down Samsung’s expansion plans.
Secondly, Samsung should continue using the Android platform but limit users’ access to the Google App store, as was the case with Amazon’s Kindle Fire. The foremost limitation of the Android OS is that Google controls all the applications that run on this platform. The concern, in this case, is that Google takes a bigger share of the revenues generated from advertising through Samsung products. The accomplishment of the preceding strategy requires the development of a comprehensive app store that will match Google’s Play Store. The benefit of an independent app store is that it will permit Samsung to control the services and applications it avails to its users.
Thirdly, Samsung can adopt the OS of new entrants as an alternative. Microsoft Windows 8 OS has been gaining popularity in the market. Samsung should use its Windows 8.1 Smartphone to enhance its portfolio. The elemental advantage of using a substitute OS is that the company will minimize the expertise and capital resources required to develop a new ecosystem. Microsoft has already developed the architecture upon which Samsung will expand its flagship products. Nonetheless, the Android OS has an established base of loyal customers who have a high affinity for Google services. In addition, Samsung will not get free services from other OS developers like in the case of Android.
The options discussed above have both strengths and limitations. By contrast, Samsung should make a strategic move if it desires to remain competitive in the adaptable global market. The best strategy is to continue using Google’s Android OS while developing a robust infrastructure for an independent OS. The rationale underpinning this assertion is that the radical adoption of a new OS will cost Samsung its market share because of the high switching costs. In addition, the proliferation of Android devices in the current market makes the introduction of a new OS a risky decision. Accordingly, Samsung should conduct rigorous market research to test the feasibility of the Tizen prototypes prior to implementing the OS entirely.
Samsung is in a unique and strategic position because it has a diversified portfolio. The essence of the preceding assertion is that the company is a primary producer of the critical components required for smartphones. Samsung’s history as a manufacturer implies that it has a good conceptualization of the factors that underpin the design of competitive products. As such, the company should use this expertise and knowledge to advance the Tizen operating system. Samsung’s cutting-edge hardware and resources will play a fundamental role in revolutionizing the Smartphone industry. The company should now focus more attention on a sophisticated OS that will outperform the existing ecosystems.
Samsung’s flagship Galaxy S mobile devices have propelled it to a leadership position in the Tablet and Smartphone industry. Despite its global dominance, the company is now experiencing headwinds in the highly competitive market. The principal problem facing Samsung concerns the development of a new ecosystem to replace Google’s Android OS. Samsung can only attain hegemony over its hardware and OS aspects if it adopts an autonomous ecosystem. Conversely, this venture requires massive resources. In addition, consumers may be reluctant to switch to another OS abruptly. As such, Samsung should continue manufacturing Android-enabled devices while it develops the right architecture for the Tizen OS.