After gaining traction in the smartphone market, the South Korean company, Samsung Electronics is attempting to take advantage of the burgeoning interest of people in smart homes by taking its challenger of Google’s software to big screen TVs from smartphones. The first TV sets that are powered by Android’s competitors, Tizen, will be released by the biggest TV maker of the world this week at the Consumer Electronics Show. This operating system will be found in all the models that will be sold this year, as long as they support web-connectivity. It is also expected that the company will give a demonstration at the CES show as to how the TVs will communicate with refrigerators, washing machines and vacuum cleaners.
It is the aim of the controlling Lee family to portray the South Korean giant as a purveyor of devices and appliances connected to the internet in order to capitalize on a market that could be worth $7.1 trillion in 2020. The company wishes to use Tizen for generating revenue from its applications and services in the same way as Google and Apple do with their own respective operating systems. After falling behind on schedule in regard to the launch of a Tizen-based smartphone, the Suwon-based company wishes to focus on TVs and other consumer electronics.
Analysts have said that as far as the smartphone market is concerned, there is very little possibility that Samsung may be able to edge out on the two already-dominant operating systems with Tizen. However, the company does stand a chance in TVs, as long as it moves quickly. The rise of Samsung to the number one spot in the smartphone market was powered by the Android OS of Google Inc. Through September 30th, Samsung shipped about 243 smartphones and nearly all of them were based on Android, which is given away by the search engine giant for a share in app sales and mobile advertising revenue.
Samsung posted the smallest quarterly earnings in the last two years so it is facing strong challenges to its supremacy in the phone market. In the quarter ending in September, there was a 33% reduction in sales while there was a 74% decline in operating profit from the mobile-phone unit, which is the highest cash generator for the company. This has prompted the South Korean manufacturer to explore other avenues for generating revenues. Tizen came to life when Samsung joined hands with NTT Docomo Inc., Intel Corp. and several others for creating an alternative to Android and exploring the software capabilities it offers.
Assisted by Samsung and several other manufacturers, Android is the primary operating system of nearly 84% smartphones sold worldwide. The pool of profits is splintered in this manner so vendors end up losing money. Even though Apple has only 12.3% of the market, it has a greater degree of control over its transactions because of the ownership of its operating system. This allows the company to set the rules of the game, something that Samsung wishes to do too.