Samsung Faces Windows Phone Dilemma

[savingpvtbryan]

Samsung faces Windows dilemma

Overseas carriers shun Windows lineup By Cho Mu-hyun Samsung Electronics? Ativ S Samsung Electronics is facing a bumpy road in a move to reduce its reliance on Google?s Android platform as overseas carriers are shunning promoting the firm?s Windows lineup, according to industry observers. The technology giant is currently the flagship vendor of the Android platform, giving it huge leverage in talks with carriers over rollout dates or promotions, a power that only Apple enjoys as well. It recently announced that its Galaxy S line of smartphones that run on Google?s operating system have sold 100 million since their launch in 2010. Industry analysts said that carriers, such as Spain's Telefonica and U.S.'s Verizon, are intentionally less enthusiastic about carrying Samsung?s Windows-running Ativ series, even though Windows 8 is a highly competitive platform. It is to prevent the Korean company from gaining too much leverage power by controlling two platforms. ?Mobile operators don?t feel inclined to promote Samsung?s Windows phones and obviously want a diversification of phone vendors,? said HMC Securities analyst Kim Sang-pyo over the phone. ?The amount of subsidies offered and product promotions by carriers are lower for Samsung?s Windows lineup compared to Android phones.? The analyst said that carriers will in the end concede to pressure from Samsung Electronics, as the firm will not sit back and see any of its marketing budget, estimated at 7 trillion won last year, wasted. ?Samsung obviously wants to lessen its dependence on Google?s Android and is considering Windows 8 as one way to maintain its growth amid the saturation of the Android platform in the market,? Kim said. ?Windows 8 phones have a great outlook as enterprise phones and can become a good revenue line for Samsung.? Kiwoom Securities analyst Lee Jae-yoon said the Korean technology firm must react well to the market situation and said it will change by next year, with Windows 8 seen as a third player along with Android and Apple?s iOS. ?After amending some problems such as slow booting time and optimization to run Microsoft Office throughout this year, Windows 8 will sustain its growth and by next year will have a larger share of the market, especially in tablets,? Lee said. By next year, mobile operators will have to sell Windows 8 phones following market demand with the vendor likely being Samsung. Carriers will have to go along with this, he said. Analysts generally agree that the tablet lineup featuring Windows 8 is its strong point. ?In the domestic market, Samsung?s Windows tablet has sold over 80,000 since launching last year, more than the sales of Google?s Nexus 7,? said Lee. ?After Microsoft addresses some of the touch-intensive platform?s shortcomings, it has the potential to become the leader in tablets.? The world?s largest electronics maker by revenue is likely to pressure partners more into promoting its Windows product line as time goes on. ?People don?t buy Samsung phones because they run on Android but because it is a Samsung phone,? said an industry official requesting anonymity. ?Its strong brand image over rivals will guarantee better sales of Windows 8 devices if Samsung sells them.? Microsoft?s next-generation operating system seems caught up in a tug-of-war between carriers and Samsung gaining more saying-power, the official said. Nokia recently released its preliminary financial information that indicates its outlook is brightening, which industry analysts estimate to be due to the rising popularity of its low-end Windows phones. ?Nokia?s returning to the black indicates that Windows phones are competitive products that can stand out in the market place,? said Microsoft spokeswoman Lee Sung-yeon. ?More and more developers are producing content for our platform and our outlook is positive.?

 

[bawboh86]

Interesting read. I'm sure they'll strong arm something soon. I honestly hope so, as having a strong player like Samsung backing Windows Phone would help the ecosystem quite a bit.

 

[Nataku4ca]

interesting tug of war between the carriers and the OEMs... I didn't realize that would happen lol
guess that might have attributed to the late debut of the Ativ S

 

[mrmdj31675]

And still no Ativ S for the US (sorry, but Ativ Oddyssey is not Ativ S IMHO)

 

[squire777]

The important thing is that they want to diversify and not put all their eggs in the Android basket. They need to make a different set of devices like high end, mid range, and low end to get maximum exposure like how Nokia is doing.

 

[ammarmalik2011]

'Samsung obviously wants to lessen its dependence on Google’s Android'

Give me a damn break. That's like saying Samsung wants to lessen its dependence on a huge cash cow that keeps milking money and market share.

 

[Black Helicopter Steve]

'Samsung obviously wants to lessen its dependence on Google’s Android'

Give me a damn break. That's like saying Samsung wants to lessen its dependence on a huge cash cow that keeps milking money and market share.

I do not dispute that Samsung has little intention of ditching Android. But, they do want to diversify their offerings. This is why they are going to bring TIZEN phones to market.

 

[ohgood]

'Samsung obviously wants to lessen its dependence on Google?s Android'

Give me a damn break. That's like saying Samsung wants to lessen its dependence on a huge cash cow that keeps milking money and market share.

Ya, it was reaching pretty far.

The argument about carriers not wanting one OS or OEM to get too strong was interesting, but not logical. My understanding about carriers was:

If it sells, contracts, we love it, doesn't matter where it came from, what it runs, etc

 

[stmav]

This topic came up last summer. With a comment from Samsung officials. It might not be reaching as you think.

Samsung “partnering with Microsoft to cut its dependency on Google Android” | WMPoweruser

Any proof as to your understanding about carriers? Or just your opinion? This article doesn't agree.

www.businessweek.com/news/2012-04-24/apple-s-dominance-has-carriers-cheering-for-nokia-windows-phone

 

[ohgood]

This topic came up last summer. With a comment from Samsung officials. It might not be reaching as you think.

Samsung ?partnering with Microsoft to cut its dependency on Google Android? | WMPoweruser

Any proof as to your understanding about carriers? Or just your opinion? This article doesn't agree.

www.businessweek.com/news/2012-04-24/apple-s-dominance-has-carriers-cheering-for-nokia-windows-phone

The first link quotes some unnamed sources, meh.

The second link is better, names people, etc. but sounds like a very soft cover-the-bases approach to keeping anyone with deep pockets happy. Ill believe it more when samsung states they are tired of selling millions of sgs3's, and just want to sell a few hundred thou a quarter instead, and actually stop producing it.

Yes, its my opinion carriers could care less about who is the oem, and who writes the code that runs on it. If verizon could get a few hundred million from RIM today to say nice things, you should believe RIM would be the golden child tomorrow. Substitute rim with whoever you like.

Its also proven through recent history that carriers will push whatever is the easiest, most recognized product that will get people to sign a contract WITH AN EXPENSIVE DATA PLAN.

 

[stmav]

I expected no less from you. But at least others can read and decide for themselves.

 

[squire777]

It would be stupid for Samsung to put all their efforts into one OS, no matter how big that OS is. Any company will look to expand their reach as it's just a way to do good business.

 

[Nataku4ca]

the key is leverage though, if u sell 1 million gs3 and have to subsidize 20% of the cost (i mean carriers) u can reduce that amount to may be 10~15% if you have leverage using other platform/brands (in another sense, threat...)

when you are really high up in the food chain you can't just look at what you make now, but what you can do in a couple years and what tools or means you have under your belt when the time comes, and leverage is what is often the most useful tool to get more profit through tug of war with the OEMs

 

[Bartdog]

7 TRILLION marketing budget? is that USD??? wow

 

[ohgood]

I expected no less from you. But at least others can read and decide for themselves.

Nice counterpoint ! I got nothing to go on now.

 

[squire777]

Your schtick is tiresome

 

[crystal_planet]

The first link quotes some unnamed sources, meh.

The second link is better, names people, etc. but sounds like a very soft cover-the-bases approach to keeping anyone with deep pockets happy. Ill believe it more when samsung states they are tired of selling millions of sgs3's, and just want to sell a few hundred thou a quarter instead, and actually stop producing it.

Yes, its my opinion carriers could care less about who is the oem, and who writes the code that runs on it. If verizon could get a few hundred million from RIM today to say nice things, you should believe RIM would be the golden child tomorrow. Substitute rim with whoever you like.

Its also proven through recent history that carriers will push whatever is the easiest, most recognized product that will get people to sign a contract WITH AN EXPENSIVE DATA PLAN.

Do you have solid numbers for that? Notarized by a lawyer? If not, I don't believe you.

 

[snowmutt]

Samsung's main dilemma, in my humble unimportant opinion, is the desire to diversify from Android is a lot like trying to find a new flavor of Ice Cream if you are a Ice Cream manufacturer. Vanilla is simply put the best selling flavor out there bar none. (Get it?? "BAR" none???) Chocolate is next, but Vanilla outsells it 2 to 1. Put some effort into Strawberry, Mint Chocolate Chip, and a few other flavors but still Vanilla rules. All the effort you are putting into promoting and producing other flavors is important- you know it is- but vanilla is the only one turning the kind of profit you want.

Sure you have the money to put into another product, and you know you should. But so long as your Vanilla, which is a good product, versatile, and what you do best, is still paying the bills and keeping the stock holders happy it is not as easy or as common sense as one would think.

Samsung may regret being so dependent on the little green robot at some point, but those profits and the way they are burying the competition right now makes it tougher then one would think to shift gears.

To put it another way, someone once asked Stephen King why he wrote such macabre stories. His answer was simple: "What makes you think I have a choice? Writing is a catch as catch can profession. You stay with what is successful." Mr King has tried to write other things, but his horror/suspense stories pays the bills.

 

[crystal_planet]

Samsung's main dilemma, in my humble unimportant opinion, is the desire to diversify from Android is a lot like trying to find a new flavor of Ice Cream if you are a Ice Cream manufacturer. Vanilla is simply put the best selling flavor out there bar none. (Get it?? "BAR" none???) Chocolate is next, but Vanilla outsells it 2 to 1. Put some effort into Strawberry, Mint Chocolate Chip, and a few other flavors but still Vanilla rules. All the effort you are putting into promoting and producing other flavors is important- you know it is- but vanilla is the only one turning the kind of profit you want.

Sure you have the money to put into another product, and you know you should. But so long as your Vanilla, which is a good product, versatile, and what you do best, is still paying the bills and keeping the stock holders happy it is not as easy or as common sense as one would think.

Samsung may regret being so dependent on the little green robot at some point, but those profits and the way they are burying the competition right now makes it tougher then one would think to shift gears.

To put it another way, someone once asked Stephen King why he wrote such macabre stories. His answer was simple: "What makes you think I have a choice? Writing is a catch as catch can profession. You stay with what is successful." Mr King has tried to write other things, but his horror/suspense stories pays the bills.

True but you offer other flavors because as popular as it is, vanilla doesn't appeal to everyone.

If I'm an ice cream purveyor, I'm going to put out other flavors, because vanilla may lose its appeal one day. Strawberry may become the flavor of choice, and when vanilla falls out of favor; I want to be there offering an alternative.

 

[fatclue_98]

It would be stupid for Samsung to put all their efforts into one OS, no matter how big that OS is. Any company will look to expand their reach as it's just a way to do good business.

Or how big the company is. HP put all its eggs into the webOS basket and look what happened. There is no such thing as too big to fail. Having lived in Miami for over 40 years I saw it firsthand. I saw Eastern and Pan Am both go belly up. Pan f***ing Am!!! More recently, Plymouth and Pontiac. Two icons of American business gone. Don't tell me Samsung has nothing to fear if it just stays with Android.