Published : Sept. 29, 2011 - 16:03
Electronics giant to sign deals with Microsoft, Intel on licensing, OS
Samsung Electronics’ latest decision to cement a cross-licensing deal with Microsoft and jointly develop a new operating system with Intel was interpreted as a move designed to strengthen the company’s software competitiveness and keep rivals at bay.
Industry watchers on Thursday said the contracts were significant in several aspects considering that electronics makers face an uphill challenge as they are pushed to develop both their hardware and software to stay in the race against daunting rivals.
On the one hand, Samsung will be adding new software to its list of assets, while on the other, forging alliances for avoiding time-consuming patent disputes.
“Rather than go through a complicated patent suit with Microsoft, (Samsung) made the right choice by wrapping up the deal at a reasonable price,” said Lee Sun-tae, an analyst with Meritz Securities.
(Yonhap News)
Samsung is said to have signed up to pay just under $5 per handset to Microsoft as loyalty.
“So all in all, it was a good deal because Samsung was able to cut a deal at costs that were lower than what Microsoft had demanded,” said Lee Seung-woo, an analyst at Shinyoung Securities.
With Intel, the South Korean electronics maker will be developing an open-platform operating system called “Tizen.” Samsung also said its Bada operating system would also be turned into an open-platform.
Scheduled to be launched in the first quarter of 2012, Tizen would give Samsung a wider choice of operating systems to compete more confidently against existing operating systems such as Apple’s iOS, while at the same time reducing its reliance on Google’s Android.
Almost 90 percent of the handsets Samsung manufactures carry the Android operating system.
The deal with Microsoft, meanwhile, has the added benefit of keeping Apple in check, industry watchers said.
“It would send a message to Apple that the South Korean electronics maker was not afraid to enlist the support of other players to forge a unified front,” one source said.
Samsung is currently embroiled in an escalating legal battle with Apple over patent infringements despite each side serving as a valuable customer to the other.
Experts said that given Samsung’s weak link in software and the rapidly-changing IT business conditions where hardware-makers are eagerly teaming up with software developers, the South Korean company would most likely continue to seek such alliances to diversify its partnership and widen its scope of assets.
Others said it would be worthwhile to see if other handset makers such as LG Electronics, HTC and Pantech would follow Samsung’s example to keep their options open.
By Kim Ji-hyun (
jemmie@heraldcorp.com)