Tsk, tsk, Tizen: How Samsung's OS stumbled -- and aims to rise again
The Korean electronics giant is shifting gears again with its troubled mobile operating system. It's now aiming for affordability as a key characteristic of Tizen smartphones.
In February 2013, a group of heavy-hitting companies led by Samsung held a glitzy evening event in Barcelona. Complete with freshly shucked oysters and made-to-order crepes, the event marked the debut of the Tizen mobile operating system, co-developed by Samsung and Intel.
Telecom executives from Japan's NTT Docomo and France's Orange were on hand to show their support, committing to using the OS on high-end smartphones that would rival Apple's iOS and Google's Android mobile operating systems, the two most popular mobile OSes in the world.
Kiyohito Nagata, managing director of strategic marketing for NTT DoCoMo and then-chairman of the Tizen Association, hailed the event as "the basement of the future success of the Tizen OS and ecosystem."
Nearly two years later, the glamor -- along with industry interest -- has faded.
NTT Docomo and Orange have scrapped their plans for a Tizen phone. Rather than go high end, Samsung now intends to chase emerging markets with cheap, Tizen-powered smartphones. The company expects to launch its first device in India by the end of the year, according to people familiar with Samsung's plans.
Tizen's rocky road to market underscores the difficulties of creating a new mobile platform -- even for a company as large and influential as Samsung. Once seen as a way for Samsung to decrease its reliance on Android, Tizen could still help Samsung defend itself against lower end competition from Chinese and Indian smartphone makers. Samsung now targets an unsubsidized price of $100 for the phones, pitting it squarely against phones in Google's low-cost Android One program.
"We're just focusing on the midrange and low end at this moment," Taesoon Jun, Samsung's chief architect on Tizen, said in an interview last week at the company's developers conference in San Francisco.
Given that inconsistency has been one of the few consistent traits of Tizen, plans for Samsung's India launch could change. The company has repeatedly delayed the first Tizen phone launch since its original date last summer. Samsung in June showed off the Samsung Z phone, which it planned to release in Russia in the third quarter. That smartphone is now delayed indefinitely.
Samsung declined to comment beyond remarks made by Jun and other executives at last week's developers conference.
Hitting a low-end wall?
Samsung's previous approach to emerging markets can be summed up as dumping older phones built with cheaper components. And it worked -- helping Samsung become the world's biggest phone vendor in places including China and India. Now, local companies such as China's Xiaomi and India's Micromax are packing better features at lower prices, allowing them to usurp Samsung's position.
Samsung acknowledged that issue last month when it reported that struggles in emerging markets contributed to a 60 percent drop in its third-quarter operating profit. It vowed to release higher quality phones for developing countries and to compete on better pricing.
But Samsung faces a threat from Google's Android One program. The initiative, launched in September, is designed to both reduce the price tag of Android smartphones, giving more budget-conscious consumers a chance to try out the devices, and to bring a more consistent Android experience, ensuring that those consumers are using Google services. That the Internet giant is making so much noise about Android One underscores the importance of those markets for future user growth.
Android One is rolling out first in India and will reach other regions in South Asia by the end of the year. For the launch, Google partnered with three Indian device makers -- Micromax, Karbonn and Spice -- to create three $100 smartphones. It also teamed up with the wireless provider Bharti Airtel, India's largest mobile carrier.
That's a tough group for Samsung and Tizen to beat.
Meanwhile, Tizen development has been anything but smooth. Samsung has had problems getting its hardware and software ready and struggled with carrier support. It still lacks essential apps and features, including big names like Facebook and WhatsApp on its app store.
While it aims to make its first splash in India, Samsung's partners remain unconvinced the company will be an overnight success.
"Everybody's a little skeptical," said one developer who's worked with Samsung in the past and spoke on the condition of anonymity. "They've tried this for a while and never got off the ground. ... And Android One's going to be some tough competition."
Tizen's tumultuous history
Tizen has been plagued by delays, something that has upset Samsung's carrier partners. Some who had agreed to sell the device for the 2013 holiday season were left instead with holes in their lineups, according to people who worked with Samsung.
And while many wireless companies -- Sprint, Orange, and Vodafone, among them -- are part of the Tizen Association, they haven't been active participants. Sprint joined the Tizen Association, quit, and later rejoined. Other carriers, such as Telefonica, have quit for good. Some have expressed concerns about Tizen's progress.
Then there's NTT DoCoMo, which was an early proponent of Tizen. It scuttled its plans early this year in the wake of tepid consumer demand beyond Android or Apple's iOS. Orange pulled its commitment in late 2013.
"They made a huge mistake in telling people what they were not going to do," said one Samsung partner who asked not to be identified. "All of the big companies lined up behind Tizen kind of dropped out."
Instead of working with carriers, Samsung in June unveiled the Samsung Z, a high-end smartphone for Russia. Launching the phone in that country should have been easier for Samsung because the Russian market is less carrier-dependent than places like the US or Japan. Even so, Samsung a month later delayed the device indefinitely, saying it needed to "further enhance the Tizen ecosystem."
Samsung ultimately wants Tizen to be the "OS of everything," as the company touted during its developers conference. "Cross-convergence is the one [area] Samsung can do best, since we do have various parts and finished products," Samsung co-CEO JK Shin said in an interview last year.
So far, the only devices that run on Tizen are a few of Samsung's smartwatches, including the latest Gear S watch, and some of its digital cameras. The company is also working on Tizen-powered televisions, home appliances and cars, some of which it's expected to display in January at the Consumer Electronics Show in Las Vegas.
Getting developers on board
But for Tizen to be widely used on everything from smartphones to cars, it needs apps, which remains a problem for Samsung. The company has offered millions of dollars in prizes and funding to get developers to make apps for Tizen. It also has worked directly with app makers to get them to support the OS, but the app store issues have been a primary cause of its smartphone delays.
The Tizen Association has been hard at work to garner developer support, holding hackathons and other events in the last few months. At Samsung's developers conference last week, the company held six sessions on Tizen compared with only one at its confab the year before. It also mentioned the software in its opening keynote.
Samsung also dangled a carrot in front of developers, vowing to give them 100 percent of the revenue from their smartphone apps (minus a "billing fee") in the soon-to-be-launched Tizen Store, compared with the usual 70 percent take they would get from Google or Apple. The revenue share won't apply to apps made for Samsung's Tizen smartwatches, however, and the offer is only good for the first year. After that, Samsung will take the usual 30 percent cut.
Samsung's offer has been enough to entice some app developers. Location-sharing app Glympse, which has partnered with Samsung on its wearables and other devices, now plans to launch a Tizen app for smartphones -- despite its previous hesitation. "About a month ago, we started looking at this, how to be effective within a Tizen phone interface," Rasekh Rifaat, a senior software engineer at Glympse, said at the conference.
Samsung's shift -- to push Tizen first with cheaper phones rather than high-end devices -- changes how some developers look at the operating system. Most consumers in places like India have little disposable income to spend on new apps or services. Instead, developers have to find ways to charge for optional features in the app instead of charging for the app itself. They also need to make their apps "lighter" so they consume less data.
"If you develop for the lower end, you need to do 'freemium'" or other similar models, said Maciej Bakalarz, founder of Travel Translator app maker Proexe. The Travel Translator app currently is available on Samsung's smartwatches, and the company has a smartphone version ready for when a phone finally launches.
"There's more risk, but you get promoted [by Samsung]," he said.
Other app makers said they're holding off on developing apps for the Tizen smartphone. Most said uncertainty over the lack of resources and demand for Tizen phone make the operating system a risky bet.
"There's some sense in having a foot in there because it might grow," said Ioannis Verdelis, founder and chief operating officer at digital keyboard maker Fleksy. "But when it comes to phones ... we're on the fence right now."
