For years now, the smartphone mobile operating system has been fully dominated by just two players – Apple Inc. (NASDAQ:AAPL) with iOS, and Google (NASDAQ:GOOG) with Android. However, there are gathering signs that Android may soon by gutted from within by one of its principle users – Samsung, the Korean electronics firm whose sales far exceed those of any other individual Android user. According to documents released at the high profile court proceedings between Apple and Samsung, the latter might soon abandon Android in favor of its own proprietary OS, Tizen.
Despite its apparently dominant market position and its robust earnings (which exceed those of its rivals, who post only meager gains despite their market share), Apple (AAPL) is apparently highly nervous of being dethroned by Android. The larger screen on the iPhone 6 is probably a direct response, for example, to the Cupertino firm’s fears that people are losing interest in expensive smartphones with small screens.
If Samsung does indeed launch Tizen, this could deflate the menace of Android and give Apple a breathing spell before Tizen catches on. The “two-party” system of iOS and Android would be joined by another major player, backed by one of the few firms with enough resources and technical knowledge to have a decent shot at creating another globally available, major operating system for mobile consumer electronics.
Samsung has been working behind the scenes to develop what it calls “the 3rd platform,” and eventually announced its plans to develop Tizen further. The OS has already been used in a smartwatch, undoubtedly allowing the Korean firm to check for bugs and to measure consumer response in a sideline niche. If Tizen proves to be a flop in a smartwatch model, this will hardly discommode the giant electronics firm, while if it succeeds, this will give Samsung pointers on how to implement it in more important products such as smartphones. The Linux-based platform can be used for other electronics, too, including but not limited to tablets, car navigation systems, and smart TVs.
Complicating the picture is the matter of apps. Apps are quickly becoming one of the principle cash cows of the electronics industry, as app sales soar and hardware sales falter. Apple has long enjoyed an advantage due to its unified environment for apps, which is attractive both to app creators and app users. Android’s fragmented hardware market has made apps a much harder sell there, due to compatibility issues sharply limiting the market size for any given app.
If Tizen becomes a reality, it will offer a unified platform similar to Apple’s (AAPL), with the same potential advantages for app sellers and users. On the other hand, the initial lack of compatible apps will limit the number of consumers willing to enter the new ecosystem, thus cutting the incentive for app makers to create Tizen apps. If Samsung can keep its proprietary platform afloat long enough, this situation will gradually correct itself. However, it is also possible that lack of this crucial revenue stream will cause Tizen to wither on the vine, leaving Apple’s iOS as the undisputed master of the mobile OS world.
