As Samsung Update has reported previously, Samsung has long been working on an alternative to Android for it’s mobile devices. Now Samsung has finally announced its first phone with this OS, the Samsung Z, in the Russian market. Visually, you’ll notice little difference between the Samsung Z and recent Galaxy devices. The interface is basically the same Touchwiz you’ll find on the Galaxy S5.
Why then, is Samsung developing it’s own OS and devices that use it? Android accounts for about 80% of smartphone sales worldwide, and Samsung is the 800 lb gorilla of Android phone makers. Other efforts to introduce alternate mobile operating systems have foundered on the rocks of iOS and Android. Even Blackberry, which was once the 800 pound gorilla, and Microsoft, which is just a gorilla, have struggled. Few have even heard of Jolla or Sailfish. So why has Samsung spent millions developing it’s own OS?
The reasons are interesting, and a story in themselves.
Reason One: Money
While Android is “free,” that doesn’t mean there are no costs to manufacturers using Android. In order to use Gmail, Google Play, Maps, and the rest of Google’s ecosystem, manufacturers must pay fees to third party testing organizations to ensure their devices meet Google’s standards. It has been reported those fees may reach six-figures. And those fees are just the tip of the iceberg.
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Microsoft owns many patents for mobile devices, collects licensing fees from roughly half of all Android devices sold, and continues to pursue licensing agreements with other manufacturers. While these fees are not generally public, it has been reported that HTC pays Microsoft $5 for each Android phone it sells. Some analysts estimate Microsoft takes in more money from Android device licenses than it does from Windows phones. Oracle claims that Android infringes on Java patents, and is seeking damages and/or licensing fees which could be passed on to device manufacturers, and Apple continues to allege that Android infringes on it’s patents.
What’s that, you say? $5 or $10 per phone doesn’t seem like that much? Samsung sold some 85 million phones in the first quarter of 2014. At $10 per unit, that’s a hit to the bottom line of about $3.4 billion (with a B) dollars a year. Not pocket change. While Samsung outsells the iPhone in many markets, Apple’s phone is far more profitable.
This article is continued: Part II can be found here: Samsung Spends Millions developing Tizen OS – Part II
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