South Korea’s government has called on Samsung Electronics and LG Electronics to join it in a consortium to develop a homegrown mobile phone operating system, a sign that Seoul fears Google’s acquisition of Motorola Mobility could pose a long-term threat to two of its biggest companies.
Samsung and LG are the world’s second- and third-biggest makers of mobile handsets but their software is much weaker than their hardware. Their most successful smart phones have relied on Google’s Android operating system.
South Korea admitted that it could be strategically dangerous to keep relying on Google for software as the U.S. firm builds up its own ability to make hardware, which is Korea’s strength.
Since Google’s acquisition, there have been fears that a tighter integration of Android with Motorola’s mobile devices will make for a stronger competitor to third parties such as Samsung and LG. Google insists it will continue to work with independent handset makers on Android devices.
Seoul’s ministry of the knowledge economy said on Wednesday that it would announce details of its plan in October. The ministry said it had invited Samsung and LG to take part but that small and medium-sized IT enterprises should form some 50 per cent of the consortium.
While the ministry has not decided on the nature of the operating system, it said it wanted something that could ultimately compete with Google’s Chrome and is considering a cloud-based system to allow the sharing of data across smart phones, personal computers and laptops.
“In the long term, we cannot go on like this by solely relying on Google,” Kim Jae-hong, a deputy commerce minister, told reporters.
Samsung declined to comment on the government plan, saying the idea was in “initial stages.” LG said it was “willing to listen” to the government’s ideas.
Telecommunications analysts said the government’s plan was impractical or unlikely to succeed because South Korea had too much ground to make up in software, and argued that handset makers should look to buy a foreign operating system or diversify their OS suppliers.
Chang Sea-jin, a professor at Singapore National University, said the government initiative was a “long shot” and looked more like a program to help struggling small and medium enterprises than to boost Samsung and LG. He argued that Samsung, the world’s biggest technology company by sales, should instead look to buy a foreign OS maker.
“In the short term, it is more reasonable to balance [Microsoft’s] Windows and Android and not rely on Google,” he said.
Samsung, whose Galaxy smart phones are the main challenger to Apple’s iPhone, already has a homegrown software system called Bada but it is aimed at low- to mid-end smart phones. Samsung’s top-of-the-line smart phones use Google’s Android. Samsung on Wednesday launched new Galaxy handsets aimed at increasing sales in emerging markets.
Although South Korea’s government regularly tries to steer companies, analysts said software design was a field in which Seoul was out of its depth.
“I understand the government’s desire to seek solutions with the threat of a rapidly changing market but this is the wrong direction,” said Greg Roh, analyst at HMC Investment Securities. “This should be left to the market.”