Samsung TV – Iceberg dodger

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Samsung’s software is poor but it is learning how to dodge the icebergs in its path.

  • Afraid to get lost in the noise, Samsung has announced some new functionality prior to MWC for its Smart TVs which will spread to its tablets and smartphones.
  • The new service is called TV Discovery which is a user experience that amalgamates TV and video content into a system where it is easy to find what one is looking for.
  • The system also offers recommendations based on viewing habits and can move content between devices.
  • It also links up with Samsung tablets giving them a universal remote function and the ability to share what they are watching with friends.
  • Initially content from Netflix and Blockbuster in the US and Acetrax, Wuaki, MovieMax, FilmIn, Chili, Pathé and SF Anytime in the European Countries will be available with more to come.
  • I see two main reasons for this move:
    • To slow the commoditisation of televisions by improving the user experience and driving desirability of this functionality which will only be available to Samsung TVs.
    • This is another step that Samsung is taking in creating its own ecosystem.
  • Deep down Samsung knows that hardware will sustain it for only so long and it is investing to try and change its stars.
  • Hence, it must take some control of the user experience and this is what Discovery TV, Samsung Apps and its additions to the Android user experience are all about.
  • If users come to love these things, they will prefer to buy Samsung and the commoditisation disaster will have been averted.
  • So far the results are poor.
  • Smart TV functionality is bad. Video codecs that are claimed to be supported do not play, network elements appear and disappear at random and good luck trying to play Angry Birds using the motion sensor embedded on top of the latest TVs.
  • Discovery TV is the next step and I suspect that it will also offer a fairly poor user experience that will not keep Apple TV, Roku and Boxee up at night.
  • However at this stage it doesn’t matter.
  • Samsung remains fantastically profitable and it has some considerable time before its hardware edge is completely eroded.
  • It is very encouraging that Samsung is acting now.
  • Many companies will sit on market leadership and fat margins and do nothing until it is too late.
  • As a result, while its initial efforts are unlikely to amount to anything, Samsung has given itself a better chance of being ready when its current competitive edge is lost.
  • It is too early to tell whether Samsung will be successful, but I can see it managing to dodge the icebergs that sank, Nokia, Motorola, HPQ and Dell among others.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.