If the Google-Motorola deal confirms one conclusion about the modern mobile industry, it is that power has convincingly shifted from hardware to software. Rivals who are sanguine about Motorola’s still impressive product engineering skills are scared that the firm will gain early access to new Android features via its future parent.
Increasingly, the main way to differentiate an Android device is via a strong user interface, like HTC Sense, or distinctive app store – and Apple has clearly shown how an integrated hardware/software experience and a compelling user interface can make up for all kinds of mediocre hardware specs.
In this environment, the traditional, spec sheet-focused handset makers have been vulnerable. Nokia‟s much maligned former CEO, Olli-Pekka Kallasvuo, saw that clearly and before most of his rivals, but the strategy he outlined to turn the Finnish giant into a web and software firm was over-ambitious and often poorly executed. Hence Nokia‟s conversion into a chattel of the biggest software player of them all, Microsoft. HTC has been moving rapidly to accumulate software and media assets, but the biggest cultural change is that being kicked off at Samsung.
The Korean vendors have been the ultimate in prioritizing hardware innovations over user experience, but in the past few years Samsung has been hiring huge teams of developers and building up its software expertise. Now, the company‟s chairman, Lee Kun-hee, has called on senior executives to explore options for expanding the firm‟s own software platform, including possible acquisitions of its own.
According to insiders who spoke to the Korea Herald, Lee called a meeting on Wednesday with top managers and told them that Samsung needed to enhance its software competitiveness to match the hardware advantages the company enjoys. The firm has been going down this road for a couple of years, creating its homegrown operating system, Bada, for midrange smart-phones; making the TouchWiz user interface increasingly strategic; and creating various app and content stores.
Lee reportedly told the meeting: "We must pay attention to the fact that IT power is moving away from hardware companies such as Samsung to software companies." It seems that Lee is looking to protect his firm against possible negative effects of the Motorola deal, even though, in official statements, Samsung has said the acquisition would strengthen the whole Android base (and it may hope that Google will make such a mess of running Motorola that one competitor will effectively be neutralized).