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Samsung will cut its smartphone portfolio by 25 percent to 30 percent next year, the Wall Street Journal reported this week. The South Korea-based company will produce fewer models and increase its focus on its core devices, Samsung’s head of investor relations said at a New York conference.
As Gigaom’s Kif Leswing noted, Samsung emerged as the world’s top phone manufacturer thanks to a “shotgun approach” that resulted in a bloated handset lineup in which one model sometimes differs very little from another. Samsung has struggled amid increasing competition (particularly with low-end devices primarily in emerging markets), which has eroded margins and led to a 74 percent year-over-year drop in mobile profits in the third quarter.
This news that the company will streamline its smartphone lineup comes on the heels of last week’s Samsung Developer Conference in San Francisco. The company laid out an ambitious agenda for capitalizing on the Internet of Things, including these announcements:
- It opened its Simband reference platform to developers, enabling them to build devices and apps that integrate with the cloud-based health platform SAMI. Samsung released an SDK aimed at helping developers leverage the multiple sensors on the Simband that measure data such as heart rates and blood CO2 levels.
- It introduced Flow, which is designed to create a consistent experience as users move from one Samsung device to another. A user could begin a video on the phone and then easily finish watching on a TV, for instance, or could continuously work on a presentation from any Samsung gadget over a matter of weeks.
- It announced plans to integrate all future appliances with the connected home platform SmartThings, which Samsung acquired a few months ago for a reported $200 million. The move will allow Samsung to integrate its gadgets such as connected refrigerators and washing machines with a wide variety of other domestic items via the SmartThings hub.
- Samsung announced that it has replaced its former smart TV developer platform with a Tizen-based Smart TV SDK.
- The company said its push into virtual reality will come to market in December in the form of its Gear VR headset.
The common thread for all these devices, software and initiatives? There isn’t one yet. But it may eventually be Tizen, the Linux- based operating system that Samsung has failed to make any progress with in smartphones. Tizen powers most of Samsung’s smartwatches, and Eric Anderson, Samsung’s vice president of content and product solutions, said last week the company will deploy the OS across its line of connected home products next year. That could extend to integrating Tizen with an upcoming version of SmartThings, which could be Linux-based. And we’re likely to see Tizen play a larger role in Samsung’s connected health and entertainment devices.
Samsung has long wanted to expand beyond hardware manufacturing into the more promising market of mobile software and services, but its attempt to build its own ecosystem within the larger world of Android has been stymied by Google’s efforts to retake control of its OS. Reports surfaced last week that Samsung is close to releasing a low-end, Tizen-based phone for emerging markets, but as Gigaom’s Kevin Tofel wrote the prospects for such a device are slim considering Android’s dominant presence in those ultra-competitive regions. Samsung faces a serious challenge in enticing developers to build for its OS of choice, but it has the worldwide partnerships and deep pockets to establish a foothold for Tizen in an IoT market that is still in its infancy. Developers frustrated with the brutal world of creating consumer apps for Android and iOS should take notice.