The Samsung Z was to go on sale in Russia in this current quarter but the company is now stating that more time is needed. At the last possible moment Samsung bailed out and failed to deliver their new Tizen OS based smartphone. This was a repeat of their embarrassing failure to launch a Tizen phone with NTT Docomo earlier this year. Samsung is now losing all market credibility by delaying their Tizen phone.
Samsung who was building credibility in the market as the number one Android OEM had a window of opportunity to launch their new Tizen based smartphone and have developers follow them. Now that window may be quickly closing due to Samsung losing ground to competing Android OEMs. In China, Samsung is losing ground according to a new Counterpoint top ten smartphones list that was recently published. Their one time flagship Samsung S4 came in at a dismal ninth place behind leading smartphones from Xiaomi, Apple and Huawei.
Although Samsung fared better worldwide, the point is that the smartphone market is maturing and shrinking. With decent smartphones like the Xiaomi and Nokia X selling for about US$130 to $160, the need for a Tizen centric budget phone has now gone up in smoke. Android phones rule in the mid to low end of the market and app developers need volume in order to survive. A start-up Tizen phone just isn't attracting developers like Samsung had hoped for.
It's been reported that Sprint, one of Tizen's biggest supporters, has dropped out of the Tizen Union as did Telefonica in Spain who is now backing Firefox with smartphones scheduled to launch later this year. Other partnering companies have also given up or delayed developing Tizen products due to low market demand potential.
Earlier this year Patently Apple reported on NTT Docomo officially dropping out of supporting Tizen. In January Docomo stated that the Japanese market wasn't big enough to accept a third smartphone OS, after Google's Android and Apple's iOS.
A new Korean report published today notes that in order for Tizen phones to spread out, its practicality as a smartphone OS should be verified, but global telecommunication companies are skeptical. Accordingly, Samsung decided to release an independent Tizen phone. Since low-budget smartphones with Samsung's own "Bada" OS were very popular, and the labor costs for developers are cheap in Russia, Samsung believed that it would be easy to make applications for Tizen in Russia.
However, different from Samsung's expectations, the application ecosystem has not panned out in Russia as hoped for with very low developer participation. An official at Samsung Electronics said, "Tizen phones are not ready to be introduced in the market yet. When prepared to meet the needs of customers, they will be out, rather than be hasty." How embarrassing a statement is that considering it's the third time there's been a delay? How can a major smartphone maker fail to launch three times consecutively and continue to think that it doesn't matter?
In the end, the Korean report's final observation was astute: "Inside Samsung Electronics, many parts, including wearable devices, have returned to Android from Tizen OS. Samsung Electronics introduced the wearable 'Gear 2' with Tizen OS in February this year, but the new wearable device "Gear Live" that launched last month was equipped with Android. The fact that Android is back in the game within four months is interpreted as that desire to continue to develop Tizen is getting weaker."
Keeping Tizen alive is important for Samsung who has decided to use this OS for future appliances, in-vehicle devices and their possible other projects like a future smart TV. Yet Google made it clear during I/O 2014 that they're moving into the Home market with their "Works with Nest" platform and Apple is going all out with HomeKit. Tizen OS in this area may again fail to impress developers who want to back winning platforms with momentum.
In the end, neither consumers nor app developers want to back a loser – and at the moment, Samsung's continued failure to deliver a Tizen OS based smartphone as promised hurts their one-time momentum and in turn hurts the entire image of the Tizen Union. Samsung's one time credibility of delivering a Tizen OS smartphone is all but spent.