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SAMSUNG TAKES ON APPLE

Samsung's galaxy of partnerships

The tech giant signals its intention to compete with Apple's iOS ecosystem through tie-ups with Netflix and Microsoft

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Samsung's new Galaxy S20 devices will feature deep integration of Netflix, and add-ons with Spotify music streaming and Microsoft's Xbox Game Studios.

Tokyo

SAMSUNG Electronics has signalled that it intends to compete with Apple's iOS ecosystem through software partnerships.

The new Galaxy S20 devices will feature deep integration of Netflix , allowing users to search for movies by voice queries to the Bixby digital assistant. Bixby's morning routines will also include Spotify music streaming, and Microsoft's Xbox Game Studios will debut its Forza Street title on Samsung's Galaxy Store for apps.

"It's been amazing to see Samsung continuously push the limits of what's possible," said Hiroshi Lockheimer, Google's Android chief. Google's operating system has been helped by and risen in parallel to Samsung's emergence as the world's most prolific smartphone maker.

Rival Apple is on a mission to develop its own content such as Apple Music, Apple TV+ and Apple Arcade, a set of in-house subscription services that the company is spending lavishly on to make it a success. Each of them benefits from hundreds of millions of iPhones already in users' hands, and they enhance and strengthen the company's protected ecosystem.

Samsung has made similar efforts, such as its Samsung Milk music service, but that has repeatedly failed. Its chronic problem in competing with Apple has been the absence of unique and differentiated experiences - an iPhone owner has access to Netflix and Spotify, as well as to the Apple-exclusive iOS services.

The partnerships announced alongside the flashy new Galaxy phones "will be critical if the company is to elevate itself beyond hardware, diversify revenue and level the playing field with Apple," said Ben Wood of CCS Insight.

Analysts now believe Samsung is on the right track by looking to deepen collaboration with content distributors threatened by Apple's strategy.

Avi Greengart, mobile industry analyst at Techsponential, said: "It hasn't been proven to work yet, but it's a much better strategy than Samsung trying to compete in content and enterprise apps itself. The cost and risk of trying to recreate Spotify, Netflix, Office or xCloud is astronomical."

IDC analyst Raquel de Condado Marques liked the synergy between Samsung's newly upgraded hardware and service partnerships, especially in gaming. With faster mobile internet speeds and better displays, "Samsung is leveraging what it does best - hardware - and allowing new partners to do the same by relying on Microsoft's PC installed base and Xbox's gaming heritage to provide a more complete platform across different technologies."

Microsoft is developing its xCloud game-streaming service, a rival to Google Stadia, which will let people experience desktop-like graphics and sophistication on their mobile devices. Netflix has a whole set of criteria as to what makes a Netflix Recommended TV, which it uses to incentivise electronics makers to present its content in the best possible form.

Both companies can benefit from having a role-model mobile hardware platform, such as Samsung's Galaxy S20 family, to demo their best mobile offerings and to direct other manufacturers to emulate.

Not all are convinced by Samsung's approach. CCS Insight's Mr Wood said: "There was no shortage of big names, but the partnerships appear to hold limited potential to build a deep services ecosystem."

Still, the South Korean tech giant is a powerful draw. Mr Greengart said: "Samsung - like Apple and Huawei - has its own centre of gravity."

He added that it is capable of commanding attention through its events and products. That makes it an appealing partner for other big industry names. BLOOMBERG