Samsung executives have been pledging for the past two years that they would turn the Korean giant into a software company, recognizing that this would be the way to compete with Apple’s hardware/software experience, and to succeed in new markets, such as the internet of things (IoT), where device hardware will be less complex and expensive than it is in smartphones.
However, while the mantras about software and innovation continue, Samsung is still regarded as a firm which excels in hardware design, marketing and distribution. Though it arguably innovated far more in terms of applications and software functionality than Apple did in 2011-2013, it lacks that firm’s differentiation and freedom of movement, because it uses Android. It has added its own user interface, and a wide range of unique features to Android, but is still closely associated with the Google platform.
Its attempts to have an operating system it fully controls have so far made little impact and are perhaps counter-cultural for a firm which has thrived on supporting any platform with sufficient customer interest. It had some limited success with its bada OS, but then merged that into its Tizen effort, based on the open source Linux variant originally co-developed by Nokia and Intel. Tizen was then seen as Samsung’s big bid to pursue its own software destiny and reduce Google’s power, but in smartphone terms this has fallen foul of the sheer dominance of Android and iOS.
Launches of Tizen handsets in Japan, Russia and elsewhere have been repeatedly delayed (though one is now apparently schedule for later this year in India), but the real imperative for Samsung is to create its own platform in newer markets where there is still everything to play for. For that reason, it has been refocusing its Tizen efforts on the IoT.
This month, it is transferring 500 software engineers away from its mobile division, reflecting the strategy to target Tizen, and other developments, at connected consumer electronics and the IoT – markets where Samsung makes many of the end points, such as household appliances and TVs, already. The 500 employees will move to product lines such as printers and consumer electronics, a move which Samsung said in a statement would “enhance our competitive edge in the IoT industry and increase synergies for the Tizen platform”.
Not that the mobile division is left without a strong base of developers – Samsung had over 40,500 software engineers across the whole organization last year, up from 33,449 in 2012 and 27,889 in 2011, according to the company. Its mobile focus means that a rising percentage have been focused on the smartphone experience. The firm has not just been investing in skills and tools but in new, flexible processes to encourage creativity and the sharing of ideas, between software teams and between software and hardware engineers.
This has been part of the mantra of now-ailing chairman Lee Kun-hee, who started 2014 by calling on employees, in a new year email to all staff, to accelerate the pace of innovation. “We have to change once again. We must give a bigger push for innovations, including in business structure, so that we can lead industry trends,” he wrote. “Research & development centers should work around the clock, nonstop. We must get rid of business models and strategies from five, 10 years ago and hardware-focused ways.”
To reflect its software focus, Samsung held its first developer conference last year and this year will lengthen it to three days, in San Francisco from November 11. Last year it had 1,300 attendees (having, it said, targeted attendance from 800), and this year is aiming for at least 2,600.
Key areas of discussion will be smart health, wearables, virtual reality, the connected home and the mobile experience. A short term opportunity to provide an integrated hardware/software platform lies, Samsung thinks, in health and fitness, especially based around its smart watches, some of which do run Tizen.
Another important area with gains only just over the horizon is the smart home, said Curtis Sasaki, SVP of Samsung’s Media Solutions Center, who said the firm planned to build a live connected home at the conference venue, showcasing the recent acquisition of the SmartThings platform, and offering developers new code to integrate their apps with home appliances.