Samsung’s Tizen: Is Ditching Android an Option?

From a BGR article about the Samsung Galaxy S4, Zach Epstein writes (emphasis mine):

My sincere hope is that Samsung takes advantage of its success and focuses its resources on refining the hardware, software and service experiences it presents to users. I want a more cohesive experience across Samsung apps. I want better services that lock users into the Samsung ecosystem for years to come. These are the things Samsung might consider working on as it develops the Galaxy S5 and other upcoming phones.

Samsung is a hardware company fighting its most important battle in an industry dominated by multiple software giants.

The kinds of integrated services Zach is hoping to see in a Samsung smartphone take incredible amounts of resources to put together: imagine the negotiations and business deals that happened in order for just the iTunes Store to exist — the same iTunes Store that recently had its tenth birthday. That’s forgetting the Movies, TV and App Stores and iCloud. If Samsung wants to play with the big boys, it needs to make one hell of a commitment.

Samsung is facing a tough decision: should the company continue to use Android in its smartphones, relying on Google to update and maintain the software and add these integrated experiences and services, take a more self-reliant approach, modifying Android so heavily that it becomes essentially a Samsung skin on an Android foundation, or — possibly outrageously (and in the style of Apple) — ditch Android altogether and create an entire phone OS from scratch? As shocking as this last option may sound, The Verge reports that a “High-end Samsung Tizen smartphone is coming in August or September of this year:

[A]ccording to [Samsung executive vice president of mobile] Lee [Young-hee] the upcoming phone will be “the best product equipped with the best specifications.”

This could certainly be pure marketing spiel. But it could also be a mysteriously vague announcement of the smartphone industry move of the year.

Let’s backtrack for a moment. In Q4 2012, Samsung recorded $4 billion in profit from its cellphone and telecom business. In the same quarter, Google recorded “just” $2.9 billion profit from all its businesses combined. Samsung is making significantly more money from Android than Google is. The question arises, does this huge reliance on Android and massive profit disparity cause tension between the two companies? And, if so, who has more to lose?

If Samsung takes the smartphone industry seriously — which I believe they do — making a bold move like ditching Android could potentially reap huge rewards for the company. If done right. But it’s a colossal undertaking and one very big risk: what if customers are more loyal to Android than they are to the Galaxy brand, rejecting any high-end device lacking the Android apps and Google services they’ve grown to love? How will Samsung launch an app store in 2013, when there are already established market leaders and competitors?

Back in January I pondered if Samsung leaving Android might just be the “story of 2013”. I still think it’s a pretty long shot, but I’m watching this space.