Samsung Tizen – Ducks and Chickens.

Duck in danger becomes chicken and egg.

• Samsung has at last launched a handset based on Tizen’s software.
• The device is called the Z1, has been launched in India and will cost just over $90.
• It was 5 months ago that Samsung delayed its handset yet again citing the need to “enhance the ecosystem”  (see Tizen – Duck in danger).
• What it actually meant was “give us time to strip it down to be as low cost as possible” to fit it into a pricing category where users only care about price.
• With no ecosystem on Tizen, the only way to sell a device is using price.
• At $90, the Z1 is significantly cheaper than Xiaomi’s entry level Redmi product which can be had for $130 but then its specifications are somewhat underwhelming.
• The Z1 features 4” screen, 1.2Ghz dual core processor, VGA/ 3.1MP front and rear cameras, 768MB RAM and 4GB internal storage.
• In contrast Microsoft’s Lumia 435 (also launched today) features a 4” screen, 1.2Ghz dual core processor, VGA/2MP front and rear cameras, 1GB RAM and 8GB internal storage.
• Critically the Lumia 435 is 23% cheaper than the Z1 and for once is able to boast that it has more apps available.
• Furthermore, Microsoft offers a fairly complete and robust ecosystem which knocks the socks of Tizen which has nothing.
• Despite this, I suspect that the real competition for the Z1 is going to be from the low end devices from the likes of Micromax, Spice, Karbonn and so on.
• Indian consumers are not very wealthy but they do already seem to have internalised what Android is and often demand it as a prerequisite at the point of sale.
• Against this the Z1 has no answer and will have to be sold on the back of Samsung’s brand and its marketing dollar.
• By having a handset running Tizen, Samsung is beginning to spread Tizen across many of its devices which could be the beginnings of proper cross device strategy.
• This is badly needed to support flagging handset profitability where its Android devices are now commoditised and pretty much controlled by Google.
• That being said, to make this work Samsung needs to deliver fun and easy to use Digital Life services on Tizen devices.
• If there are none of these services then there is little point in any of these devices talking to each other as there will be nothing to say.
• So once again the fundamental limitation of Tizen is exposed: it has no Digital Life services from which to create an ecosystem.
• Failure to create one will lead to Tizen competing against Android purely on hardware.
• Because Tizen will always be much lower in terms of volume, there is no way it will be able to match prices and still be a viable proposition for the vendor.
• This is the difficult chicken and egg situation where Tizen finds itself.
• Without some volume there will be no Digital Life services and without Digital Life services there will be no real volume.
• Hence, I remain pretty cautious on the outlook for Tizen but it is now certain than Samsung is far more committed to Tizen than it seemed 6 months ago.