Tuesday, February 4, 2014

0205-With Tizen, Samsung Bets on Cash, Clout



Samsung mobile devices at the International Consumer Electronics Show in Las Vegas last month.
So far no one uses Samsung Electronics Co.'s new mobile operating system, Tizen, which hasn’t even appeared on a commercially available smartphone.

So why would any developer want to build an app for it?

For the publishers of Apartment Finder, a U.S. apartment-rental listings magazine, website and mobile app, you can boil it down to size — specifically, Samsung’s hugeness and Apartment Finder’s relative smallness.

The company behind Apartment Finder, Norcross, Ga.-based Network Communications Inc., has already built an app for Apple Inc.’s iOS and Google Inc.'s Android mobile operating systems–in short, for all but a few U.S. smartphone users.

The company decided it was worth it to invest in a Tizen app, which it has rolled out to, well, nobody just yet. The hope is that Apartment Finder will be well-positioned should Tizen gain traction among smartphone buyers, it says.

Tizen’s success, of course, is far from assured. Skeptics argue that Android–on which all Samsung smartphones currently operate–and iOS are so dominant that there’s no room in the market for a third operating system–as Microsoft Corp., with its Windows Phone, and BlackBerry Ltd. have found. Both of those operating systems have managed to capture a percentage of the market only in the low single digits.

The trouble facing Samsung, as far as Tizen goes, is that consumers don’t want to buy a phone running an operating system that can’t support their favorite apps; and developers don’t want to build an app for an operating system that nobody is likely to use.

So Tizen’s backers, which include co-developer Intel Corp., are working hard to make sure that apps will be plentiful from day one. To do so, they’ve been offering money to developers who build apps for Tizen, as well as hosting developer contests like the Tizen App Challenge, which is handing out more than $4 million in prizes.

For Apartment Finder’s backers, Samsung’s sheer size and dominance in the smartphone business was a major factor.

Stuart Richens, Network Communications’ vice president of digital media, said in an interview that the company decided to develop its Tizen app because it believed that Samsung just might be able to carve out market share for Tizen as it attempts to build an Apple-like ecosystem. And an early bet on Tizen could help Apartment Finder earn a favorable spot in Tizen’s app store, he said.

“We’re a small shop, so utilizing limited resources to pursue a new and unproven technology like Tizen was not an easy decision for us to make,” he said.

Network Communications relies heavily on mobile devices, which Mr. Richens says drives about half of the company’s traffic.

Still, Mr. Richens wasn’t aware of Tizen until the summer, when a friend and app developer told him that Samsung had poured money into his business to fund a Tizen version of his app.

After doing some research of his own, Mr. Richens thought it was worth taking a chance with Tizen–particularly given the prospect of recouping some of the costs in the app contest.

Unlike with its Apartment Finder apps for iOS and Android, which the company developed in-house, Network Communications outsourced some of the work for its Tizen app, given the difficulty of building an app for an operating system that isn’t widely available yet.

Mr. Richens said the company had considered developing an app for BlackBerry or Windows Phone, but after sifting through market-share statistics and its own data, didn’t see the potential user base to justify building an app for either platform.

Can Tizen break through as a viable contender to Android and iOS? Samsung surely hopes so. But it will need a lot more third-party app developers–and much bigger ones too–to make the same calculation that Mr. Richens has.