By Jonathan Cheng
SEOUL-- Samsung Electronics Co. will release a smartphone in
India that runs its homegrown Tizen operating system, a major step
by the world's largest phone maker in advancing an alternative to
Google Inc.'s dominant Android platform.
The planned launch, scheduled for Wednesday in New Delhi, comes
after a year of frustrations and near-misses, underscoring the
challenges of competing in the cutthroat market for mobile software
and services, which is increasingly dominated by Google and Apple
Inc.
By focusing on first-time smartphone users in India and loading
Tizen onto other electronic devices like televisions and
smartwatches, Samsung hopes to gain a foothold in parts of the
market where its Silicon Valley rivals aren't entrenched players.
The entry-level device, dubbed the Samsung Z1, will be priced at
less than $100.
Tizen's success is far from guaranteed, and industry watchers
say the new smartphone is likely to face long odds at a time when
profits at Samsung's mobile division are slipping. But with
competitors quickly gaining ground, Samsung is eager to use its
lead in the global handset market to establish itself in software
and services.
Samsung has released a series of devices powered by Tizen,
including cameras, smartwatches and a prototype television, but it
has struggled to develop a Tizen-powered smartphone. Smartphones
are widely regarded as the most important consumer-electronic
devices because they have driven much of the industry's innovation
and profit over the past eight years.
On several occasions last year, Samsung tried to launch a Tizen
smartphone variously in Japan, France, Russia and India. In each
case, the South Korean company or its partners balked at the last
minute, citing a lack of support from the market--from carriers and
from app developers.
This time around, Samsung overcame these obstacles by bypassing
carriers and app developers, selling the phone directly through its
retail networks and using Web versions of Facebook, Twitter and
YouTube to cover over the fact that none of those companies built
Tizen-specific apps. Users can, however, download Facebook Inc.'s
WhatsApp from Tizen's app store.
Samsung has suggested that it will play up the Samsung brand
name to sell the new device in a bid to compensate for Tizen's
relative obscurity.
Samsung executives say they believe that if the new smartphone
can gain traction in India--a fast-growing market where the company
estimates 70% of people still use basic cellphones--Tizen could
build a big enough following to attract some app developers. That,
in turn, could help it build more credibility with consumers and
developers.
Samsung is planning to put Tizen into almost every product it
manufactures, including home appliances and wearable devices, where
there isn't a strong incumbent platform. The company is trying to
establish itself as a leader in the "Internet of things," the
effort to connect household items to one another.
At a trade show in Las Vegas last week, Samsung co-Chief
Executive B.K. Yoon outlined Samsung's broad ambitions for the
Internet of things, and said every Samsung television would soon be
powered by Tizen. Samsung is the world's largest maker of
televisions, with about one-third of the global market.
Google, whose Android platform powers nearly every smartphone
that Samsung now sells, has been closely monitoring Tizen's
development, and some Android executives are concerned about the
possibility of Google's biggest smartphone partner trying to build
an alternative, low-end operating system.
Launching a successful mobile operating system is a tall order.
The market has calcified around Android and Apple's iOS, which
together accounted for 95.8% of smartphones sold in the third
quarter of 2014, according to market-research firm Gartner.
Attempts by Microsoft Corp. and BlackBerry Ltd., among others,
to break that duopoly have foundered. Neither has succeeded in
grabbing more than 5% of the market.
"Carving out a significant share of the smartphone market with a
new operating system will be very challenging for Samsung, even
with a low-end device," said Cathy Boyle, an analyst at research
firm eMarketer. "Android smartphones, which run the gamut in price,
have a variety of apps to choose from--apps specifically designed
to run on the cheaper and somewhat less-sophisticated devices."
Even Samsung's Mr. Yoon has acknowledged the challenges. In an
interview ahead of last week's trade show, he said that, "for
phones, apps are important. For a Tizen phone to come out, there
needs to be an ecosystem of apps."
As Samsung struggled to launch a Tizen smartphone last year,
aggressive low-cost competitors like India's Micromax Informatics
Ltd. and China's Xiaomi Corp. dug into Samsung's market share with
sleek Android smartphones at a fraction of Samsung's prices.
Last September, Google's Android chief, Sundar Pichai, flew to
New Delhi to announce a partnership with local manufacturers to
launch phones priced at about $100 and running a version of Android
that is tightly controlled by Google.
Samsung itself has been a contributor to, and a beneficiary of,
Android's strength, and has been careful not to be seem to plug
Tizen too aggressively. The company frequently talks up its
commitment to Android, which provided Samsung with a readymade
platform but effectively transferred control over the user
experience on its own smartphones to Google.
Samsung has attempted to modify Android to give its smartphones
a distinct experience, but Google has clamped down on how much
Android its Android partners can tweak their phones.
Write to Jonathan Cheng at jonathan.cheng@wsj.com
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