At its analyst event, Samsung revealed that the company will be turning its attention to software to be competitive moving forward. The company began its presentation talking about Samsung’s ascension in the mobile space to becoming the largest phone-maker in the world, dethroning veterans like Nokia and Motorola.
To continue its growth, Samsung Electronics president and CEO Lee Sang-hoon noted that the company must “reinforce our competitiveness in software platform, design and IT.”
“Industry-wide tech development is shifting from hardware to software,” Lee said in a report published by the Wall Street Journal, and Samsung is responding by hiring more software developers and creating research centers in local markets to address local needs.
Samsung already spends over $3 billion a quarter, or over $12 billion annually, on software research and development, and this massive investment will continue to grow.
An increased investment in software development could rock Samsung’s relationship with Google. Though the two are big partners–Samsung achieved smartphone dominance by using Google’s Android operating system–the relationship between Samsung and Android has been speculated as being on shaky grounds in recent years following Google’s acquisition of hardware-maker Motorola Mobility. Publicly, Google justified its entry into the hardware space saying that the acquisition was made to bring Motorola’s extensive patent portfolio in-house in a deal that costs over $12 billion. Privately, though, it’s been rumored that Google was making the move in the unlikely event that Samsung went rogue and abandoned Android for its smartphones.
Samsung is also diversifying its portfolio, which may be cause for concern for Google. In addition to rolling out its own services and apps along with the TouchWiz interface for its Galaxy range of Android products, Samsung is also working on a new mobile OS together with partner Intel in the form of Tizen. Like Android, Tizen is intended as an open OS that’s scalable and could be positioned for use in the connected and smart phones, appliances, cars, homes, and TVs. And with TouchWiz, Samsung could easily transition its massive user base of Android consumers to Tizen with minimal disruption.
As TouchWiz masks the true look of Android, Samsung could replicate the same look and feel of TouchWiz on Android with a TouchWiz skin on Tizen. For consumers, the transition should look the same if Samsung does in fact abandon Android. The only disruption would be having to re-purchase apps, movies, and other content. However, Samsung may be working on a solution for that as well in the event that it goes solo away from Google–the Samsung Apps and Samsung Hub for other digital content could allow consumers to find similar apps on Tizen if the migration happens.
So though software may be a way for Samsung to differentiate itself on the market against other Android experiences–like HTC Sense on HTC phones–software may have a more interesting effect for Samsung as it tries to control the entire ecosystem. In doing so, Samsung may take a more Apple-like strategy by using its own Tizen OS–rather than relying on another player to build its operating system–and unifying the OS together with its own hardware.