11/11/2009
Wall Street Journal
Samsung Offers Smartphone Software As Competition Intensifies
By EVAN RAMSTAD
SEOUL—Samsung Electronics Co. next year will produce smartphones based on its own operating software and encourage software developers to write programs for them, a step that puts the world’s second-largest cellphone maker in competition with some of its key technology suppliers like Microsoft Corp. and Google Inc.
The move is a sign of the rising importance phone manufacturers are placing on controlling their own platform, as companies like Apple Inc., Research in Motion Inc. and Palm Inc. do with their smartphones. Nokia Inc., the world’s largest cellphone maker by unit sales, has two proprietary operating systems for smartphones.
Samsung Electronics liquid-crystal display at the Korea Electronics Show 2009 in Ilsan, South Korea, last month
Samsung executives said the company will continue to offer smartphones based on many types of operating systems, including Microsoft’s Windows Mobile and Google’s Android. “We feel we need to be multi-platform in smartphones and cannot just focus on one,” says Lee Ho-soo, executive vice president in charge of Samsung’s strategy for product software and content.
But the company, as it did with regular cellphones, is also seeking to control the direction of its smartphone products by offering its own operating system. The move also provides a hedge in case developers of the other systems take financial or technical steps that Samsung doesn’t like.
Samsung on Tuesday launched a Web site aimed at attracting software developers to its proprietary operating system, which it has named “bada,” the Korean word for ocean. It will provide a software development kit to programmers next month. The company hasn’t decided whether to let other cellphone makers to build phones based on its software.
Samsung will offer its first bada-based smartphone in the first half of next year. The company in September opened its first online stores for selling smartphone software in the U.K., France and Italy and aims to provide such service in 30 countries next year.
“The company wants to be a total provider like Apple, with its own platform and app store,” says Greg Noh, analyst at HMC Securities in Seoul. “Being a total provider is every company’s dream right now.”
Though it accounts for about 20% of the global cellphone market, Samsung is a latecomer in smartphones, which is the industry’s fastest-growing and most profitable segment. Smartphones will account for about 16% of all cellphones this year, but represent less than 5% of Samsung’s business.
To date, most of Samsung’s smartphones are built around Windows Mobile software but the company has also built a few Android-based models and two that use a Linux-rooted operating system called LiMo.
Mr. Noh estimates that bada-based smartphones will account for half of Samsung’s smartphone lineup by 2012. Samsung’s Mr. Lee said it’s too early to make such estimates, however.
