Samsung Wants Its Own Android

Actions speak louder than words: Samsung continues to develop its Tizen platform that is a clear alternative to Google  (NASDAQ: GOOGL  ) Android. The operating system is also being backed by Intel  (NASDAQ: INTC  ) , who continues to tap mobile, albeit mostly unsuccessfully. Samsung has high hopes for its fledgling operating system.

In the following video, Fool contributor Evan Niu, CFA, and Eric Bleeker, CFA, discuss whether or not Samsung really has a chance at competing with Tizen.

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  • Report this Comment On August 13, 2013, at 10:41 AM, SSchlesinger wrote:

    They are too quick to dismiss Tizen. It seems logical to stick with the large players in the market. However lets look at what's going on. When Apple comes out with new phones people don't line up for hours as much as they used to for the new iPhone. In fact iPhone sales are starting to fall. The cell phone carriers such as AT&T and Verizon have this business model where they buy a phone and lease it back to their customers over a two year period. Even T-Mobile non-contract for service does obligate you for paying for your phone should you bail out early.

    The carriers are paying for phones and making little if any money on it, they are feeling pricing pressure from other carriers because in the USA the cell phone market isn't growing, so they need to grab customers from other carriers. Again, pricing pressure leads to lower margins, where do you grow from here?

    The allure of Tizen is that carriers can set up their own markets. Currently Apple and Google keep around 30% from all sales on the iTunes or Play store. If consumers spend on average $10 a month in these stores that's $3 a month for Apple and Google. Now what if we moved the model away from them and toward AT&T and the other large carriers? If they can have eventually 10 million customers a month spending $10 a month that means $30 million a month in revenues. Not only that but they would have an OS that a third party like Apple or Google controls. The carriers can push updates when they feel like it.

    Samsung is developing Tizen from a position of strength. They could co-brand stores together with the large carriers so both Samsung and the carriers tap into the profits. They can also change the model so that the Tizen based phones are less expensive and more geared toward teenagers who may spend more in stores than adults. Tizen also has the opportunity to go from phone to an OS for computers. Using Intel it would be one platform for PC, tablet, phone, and desktop.

    I also suspect that Google buying Motorola mobility has something do with this. You never know, Google could release some killer new Android OS and give Motorola a six month head start over the other handset manufactures.

    Regardless, i wouldn't be fast to write Tizen off.

  • Report this Comment On August 13, 2013, at 1:56 PM, misc05 wrote:

    ....and there could be Meatballs dropping from the sky and ....we stop paying TAXES forever..... and.....

  • Report this Comment On August 13, 2013, at 2:56 PM, OneMist8k wrote:

    Blackberry 10 and Windows Phone could not gain traction in the marketplace. Tizen has an even steeper uphill climb.

    Tizen may make the purchase of a phone from a carrier slightly cheaper, and the partnership with Intel may make it slightly more performant, but that won't be enough to make me want to learn another OS to write apps and support. Improvement has to be a lot more than "slightly".

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