Samsung – The slow subtle web

Extending HomeSync is yet another strand of the web.

• Samsung’s moves are subtle but taken together it is clear that Samsung is intending to build its own ecosystem to the detriment of Google.
• The latest move is to allow its HomeSync media center to begin working with non-Samsung devices.
• This could be a ploy to bolster poor sales by making the device appeal to more users but I think that there is a longer term game plan attached here.
• This plan is to attract more and more users to Samsung services whether or not they use a Samsung device.
• Samsung currently makes excellent margins on its hardware (especially smartphones) which will not be sustainable unless something changes.
• Samsung has a brand, scale and hardware design advantage over much of its competition but devices are becoming more and more commoditised.
• This forces differentiation into software and specifically into the ecosystem,  as the user experience and even applications are now pretty similar across the two main ecosystems.
• This is why Samsung is spending a fortune on developing its own services such as ChatOn and on recruiting engineers like crazy in Silicon Valley.
• The end result is likely to involve Samsung taking the Android code off in its own direction just as Amazon has done and as Nokia is rumoured to be contemplating.
• This will be the opening shot in what I think will be the biggest battle in the technology industry over the next 3-5 years.
• Forget Apple vs. Samsung. The real fight will be Google vs. Samsung as Samsung must remove Google from its devices if its margins are to stay above 10%.
• Google is well aware of this and this is the only rational reason for it to hold onto the white elephant that is Motorola Mobility.
• Motorola will provide a route to market for Google applications should Samsung cut it off.
• This will be easier said than done as Google applications are currently the 2^nd, 3^rd, 4^th, 5^th and 6^th most popular apps on US smartphones.
• Hence, Samsung’s strategy is both slow burning and looks to be a long shot.
• However, don’t forget how everyone laughed when Samsung said in 2004 that it would become the number 1 smartphone maker in the world.
• Samsung is nothing if not patient.