Samsung's Tizen-powered Z1. Photo: Samsung
Samsung's (NASDAQOTH: SSNLF) Tizen-powered smartphones are more popular than BlackBerry's (BBRY 3.42%) handsets, according to research firm Strategy Analytics. That's not a ringing endorsement for Tizen: Alphabet's (GOOG +1.44%) (GOOGL +1.71%) Android still powers the overwhelming majority of its smartphones.
Still, it's doing better than BlackBerry, whose market share fell to an almost undetectable 0.2% in the third quarter. Given its increasing irrelevance, the days of BlackBerry's proprietary operating system appear to be coming to an end.
BlackBerry falls to fifth place
BlackBerry sold 800,000 handsets in its August quarter, a low not seen since 2007. BlackBerry is scheduled to report its results for the November quarter on December 18. Assuming Strategy Analytics is correct, don't expect much of an improvement in handset sales.
Android and iOS have been the dominant smartphone operating systems since 2011, when they first captured more than 70% of the market. Since then, their duopoly has only intensified: in the third quarter, they combined for nearly 98% of the smartphone market (Android taking 84.1%, iOS accounting for 13.6%). BlackBerry once occupied third place, but lost that spot to Windows Phone in 2013. Now it's been overtaken by Samsung's Tizen, falling to fifth place in the process.
Last month, BlackBerry took the unprecedented step of launching an Android-powered smartphone, the BlackBerry Priv. That could help boost its handset business overall, but could further erode the market share of its proprietary operating system. In its earnings release, BlackBerry affirmed its commitment to its own platform. "The company remains committed to the BlackBerry 10 operating system," it wrote. Still, it's hard to imagine BB10 remaining viable for too much longer.
BlackBerry's average handset sold for around $240 last quarter. The Priv, at $699, is nearly three times more expensive, which could limit its demand. It also faces distribution issues -- only one major carrier in the U.S. currently supports it. And as an Android phone, it competes with a vast array of models, including Samsung's similarly priced flagship Galaxies. But if BlackBerry intends to stay in the handset business over the long-term, it seems likely do so primarily as an Android vendor.
Tizen may be viable, but probably not for phones
The same is true for Samsung. It shipped about 1 million Tizen-powered smartphones in the third quarter, giving its operating system 0.3% of the handset market, but it shipped more than 80 million Android-powered smartphones over the same period of time.
Samsung's reliance on Android has made the company vulnerable to price competition. Other Android vendors like Huawei and Xiaomi have devastated Samsung's handset business in emerging markets such as China, where their low-cost smartphones have proven attractive to consumers. Although Samsung modifies Android slightly with its TouchWiz skin, it isn't in control of the platform. Consumers are free to move from one Android vendor to another with relative ease. Tizen would give Samsung a buffer against its competitors. Once locked into the Tizen operating system, consumers would find it difficult to switch.
But Tizen faces the same issues as BlackBerry's BB10. With such low market share, it's hard to entice developers to support the platform. A million handsets may be enough to beat BlackBerry, but it's not enough to make Tizen a legitimate alternative.
