Why Samsung and Microsoft are partnering together?
On 7th August, 2019 Samsung announced a partnership, during the launch of Galaxy Note 10 in New York, that many were speculating for many months. It was their partnership with Microsoft. Even Microsoft CEO, Satya Nadella made a surprise appearance on the stage alongside then Samsung Mobile chief, DJ Koh. Since then, the partnership between Samsung and Microsoft has grown stronger, with Samsung incorporating many Microsoft services in its flagship devices. But why is this partnership happening in first place? And, what’s in there for both of these teach giants? In this article, we are going to explore just that, because this partnership is much more bigger than what it seems on face of it.
Microsoft’s failed gamble of Windows Phone
Microsoft has been the market leaders in desktop operating systems since many years. Many people only remember Microsoft Windows Phone operating system, released in 2010, which was intended to compete to Google’s Android and Apple’s iOS. However, Microsoft’s history of mobile operating system dates back to 1996 (named as Windows CE at the time). At that time, it was known as Windows Mobile. This operating system was released much before the arrival of smartphones running iOS and Android. This operating system was mainly intended for business and enterprise customers, among whom Blackberry was very popular at the time. At its peak, Windows Phone operating system had a market share of 47% in United States in 2007 (ironically in that year, Steve Jobs introduced the first ever iPhone). That market share significantly dropped to 3% in 2011 due to stiff competition with Android and iOS, and lack of app store, which was the driving force in smartphone revolution.
To combat this, Microsoft launched a completely new mobile operating system, known as Windows Phone in 2010. This operating system was completely a redesign, it featured tiles layout which was seen in Windows 8 desktop operating system. But most importantly of all, it featured an app store. Microsoft wanted to capture some market share of mobile operating systems from Google and Apple. However, it achieved far from expected targets. Two major factors lead to the demise of Windows Phone OS:
- Like its Desktop operating system, Microsoft licensed its Windows Phone os to the smartphone manufacturers, unlike Android which was an open-sourced operating system, and Google only charged for its Google Play services. This made companies less likely to build a windows phone, since it reduced the profit margins.
- And secondly, and probably the biggest one was the lack of applications on Windows app store. This created a cycle, where-in developers didn’t wanted to develop apps for Windows App store since it didn’t had enough users to justify time and effort for developers to do so, and for users, it drove them away from Windows smartphones since it didn’t had their favorite apps on Windows app store.
Hence, due to lack of demand, Microsoft ceased the development of Windows Phone Operating System in 2017.
Rise of Samsung as a Smartphone giant
Samsung is currently the biggest smartphone brand in the world, with nearly 21% market share around the world. The biggest driving force for Samsung has been the Google’s Android operating system. With the launch of Galaxy S2 in 2011, Samsung presented itself as a worthy competitor the iPhone for the first time. Without Android operating system, this won’t have been possible. It didn’t stop innovating. Samsung also brought the trend of big screen devices with Galaxy Note line of devices and brought the trend of edge-to-edge displays in smartphone market. Not only flagship, but with it’s Galaxy M and A series devices, Samsung offers smartphones in every price bracket.
With now Samsung leader in foldable devices as well, Samsung is poised to be the biggest competitor in smartphone market for future as well. Many other Android competitors like Sony, HTC and LG have failed to replicate its success.
So, what’s in it for Microsoft and Samsung?
There are two things, one ecosystem and other is services. Since last few years, there has been lack of innovation in smartphone industry and improvements in reliability of smartphones. This has lead to stagnation of smartphone sales around the world, apart from emerging markets. In some cases this has lead smartphone companies to increase its prices, to keep up the growth year on year. But, analysts predict that this increasing of prices will have an ceiling. Hence, the biggest driving growth for revenue in future will the services. Apple, one of the biggest tech companies of the world is also shifting focus from selling iPhones to creating new services like Apple TV and Apple Arcade to drive constant revenues for future. And in this, their superior ecosystem would help in success of their service as many users are now locked in Apple ecosystem with iPhone, iPad and Mac.
Here comes the partnership between Samsung and Microsoft. Ever since the loss of Windows Phone, Microsoft has shifted its focus to selling its cloud and office 365 services to users. With this partnership, Microsoft gets one of the biggest smartphone user base, as customers for their services. Meanwhile, Samsung whose smartphone uses Android lacks seamless interface with Windows laptops and desktops, which Apple has with its iPhone and Mac. With this partnership, and development of DeX, Samsung is able to complete its ecosystem, and gives another reason to buy a Samsung product. Through this strategy, Samsung is able to preserve its existing user base, by the way of ecosystem, and can also attract new buyers, looking for a ecosystem in Android, similar to Apple.
So, what are the services that they’re going to be offering?
In August 2019, it was announced at the launch of Galaxy Note 10 series, that Galaxy Note 10 devices would be sold at Microsoft retails stores. Microsoft also announced that Galaxy Note 10 devices will come with bundle of Microsoft applications like Office apps, OneDrive, LinkedIn, Outlook etc preinstalled. Samsung also revamped its DeX experience on Windows, with the ability to use all the apps on the Samsung device on the Windows PC. Your Phone App for windows was also showcased where-in users could cast screen of their devices to their windows PCs, receive calls and messages directly to their Windows PCs, without the use of any wires.
In February 2020, at the launch of Galaxy S20 devices, Samsung and Microsoft announced that they’re working together on Xbox’s cloud-based game streaming, similar to Google Stadia. They announced that this service will be available in future Galaxy devices, and will use Microsoft’s xCloud. Microsoft also unveiled Forza Street game for Galaxy devices.
In August 2020, at the launch of Galaxy Note 20 devices, Samsung unveiled the ability to interact with mobile apps like Instagram and Whatsapp using their Windows PC. Samsung also announced a unique Xbox game pass app for Samsung’s Galaxy app store. This app included exclusive expansion packs and other downloadable content. Some of the features like in-app purchase in the app are only meant for exclusively for Galaxy store version of the app. The companies also offered exclusive Note20 bundle, which included three months of a Xbox Game Pass Ultimate subscription that is required for Microsoft’s cloud gaming platform, which was to be launched on September that year, and a Power A MOGA XP5-X Plus bluetooth controller with an attachable phone clip.
