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Samsung's Next Product Could Be a Bigger Threat to Google's Android Than Anything Apple Has Released

By Sam Mattera – Feb 23, 2014 at 7:00PM

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Samsung could be about to fragment Google's Android ecosystem further, posing a bigger threat than any of Apple's competing products.

The second version of Samsung's (NASDAQOTH: SSNLF) Gear smartwatch, unveiled yesterday, will run Tizen, its own operating system, not Google's (GOOGL -0.90%) Android.

Wearables seem to be emerging as the next great tech trend, with companies such as Apple (AAPL -2.12%) diligently working on smartwatches and similar sensors to extend the usefulness of their handsets. With Samsung pushing its own operating system at the expense of Google's Android, it's a sharp blow to the Android ecosystem, and should cause further fragmentation.

The growing importance of wearables
At least at the high end, the smartphone market appears to be near saturation. Both Samsung and Apple have disappointed in recent quarters, as sales of their high-end handsets have come in weaker than analysts anticipated. To be clear, the businesses are still growing, but the days of double-digit expansion look to be long gone.

To reignite growth in their businesses, both Samsung and Apple appear to be turning to wearables -- a growing market that's still in its early stages. Samsung struck first, rolling out the Galaxy Gear smartwatch last year.

For now, Apple's wearables remain unseen, but various media outlets have reported on Apple's forthcoming iWatch project for over a year. Patent filings have suggested that Apple's interest in wearables may extend to headphones as well.

The advantage of having a walled garden
Apple's wearables, whenever they arrive, will more than likely compliment its existing iOS operating system, serving to bolster the appeal of Apple's growing mobile platform. 9to5Mac reports that Apple's watch will run a modified version of its iOS operating system.

If Apple's watch is anything like Pebble or Samsung's first Galaxy Gear, iOS developers should be able to easily create apps taking advantage of Apple's wearable technology. 

Complicating matters
Google's Android ecosystem should be capable of something similar: Indeed, Samsung enticed some Android developers to code for its original, Android-powered Galaxy Gear. But with its focus shifting to Tizen, the growth of wearable technology could only serve to fragment Android further.

Samsung is, without a doubt, the most successful of Google's hardware partners. Last year, OpenSignal estimated that about half of all Android devices in existence were made by the South Korean tech giant, while surveys have indicated that consumers are actually more familiar with Samsung's Galaxy brand than they are with the Android name itself.

Samsung's original Galaxy Gear was widely panned, and failed to generate substantial sales. Still, that hasn't stopped Samsung from trying -- less than six months later, the company is back with two new models. Given its success in smartphones and its growing retail presence, it's not a stretch to assume that of all Google's hardware partners, Samsung has the best chance at succeeding in wearable technology.

But if Samsung's Tizen-powered watch succeeds, it would be a blow to Android developer community. Android developers, looking to take advantage of Samsung's new hardware, would have to familiarize themselves with Tizen, making the Android platform even more difficult to develop for than it already is. They'll have to work within the confines of Samsung's own app store rather than Google's, further complicating matters.

Google's other partners, including HTC, and Google itself are said to have their own watches in the works, ones that will likely run Android. That could make developers' lives even more difficult, as apps written for one watch wouldn't work for another. This wouldn't be a big deal if these watches were truly separate, standalone platforms -- but they're not. For now, the smartwatches that have been released, including Samsung's, serve to compliment -- not replace -- an existing handset.

The same is true for many of their apps: Both the Evernote app and the RunKeeper app for Samsung's original Galaxy Gear worked in conjugation with their handset counterparts, syncing with the Android app on the user's phone.

Boosting Apple's app advantage
Despite the overwhelming market share of Google's Android, developers continue to favor Apple's smaller platform. With a limited number of different iPhone models in existence, developing for iOS is easier and less expensive. In contrast, the wide variety of different Android-powered devices makes it harder to develop for -- an app that works fine on a Samsung-made phone may not work at all on another handset.

As the handset market matures and shifts to wearables, Apple's advantage should re-exert itself. Samsung's decision to use Tizen for its smartwatch has further complicated the Android platform.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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