Well As all my previous articles talked about strategy that
is 60,000 ft. above the ground thing, in my current analysis/observation/rant
my focus is moving to 30,000 ft. above the ground things.
I have always been amazed by strategic actions companies
take to fortify its core competencies. In this process their core competencies
evolve and they tend to transgress on others ground. Google, has core
competency in the domain of search. They always want that users never stray
away from their websites, mails and operating systems. They paid a billion
dollar every year to Apple to ensure that their search is the default search on
apple devices. They paid a billion dollar to an operating system startup, and
then gave away the mobile OS (Android) free of cost to all the companies that
were struggling to put together a reliable software platform to compete with
iOS. And today they have their applications on 85% of smart phones as default
and more than 90% smart phones in total.
But as market never remains the same and continuous change
is only constant thing. Samsung the biggest player in Android smart phone market
plans to come with Taizen OS. Amazon modified the stock Android and made its
own android for kindle devices and Amazon Fire phones. Apple that used to be
pinnacle in terms of product prices is offering products like iPhone 5C to
target price conscious customers. There seems to be paradigm shift where focus
is on two things:
- 1. Market Share
- 2. Eco-system ownership
But why such a frenzy when everything is going fine for all
the big players. And at that time Google’s Eric Schmidt’s stating that Amazon
is their biggest competitor.
Well to understand all the crazy
activities we have to understand one basic thing, everyone works to earn money.
And digital world has two primary ways to earn money either sell advertising
space or sell advertised product. So instead of writing it in thousand words a
picture will save yours and my effort to be on same page.
So how do you want to earn money, that’s the question whose
answer will tell you, why facebook wants facebook smartphone to click with
masses. Why Amazon wants people to use Amazon Fire and why Google wants to own
ecosystem.
If we take a broader look at smartphone market specifically,
devices are becoming commodities but the money lies in Advertisement selling
and online retail. If a company has strong grip on software ecosystem every
device can be considered as a retail store in the hands of end user. They are
end user who buys stuff online and are target for advertisers. Hence for all
companies who want to make money they have to control the mobile ecosystem
primarily software.
So where does it leave Samsung. Well the answer lies in
Tizen.
