Samsung plans M&As to support software play

Caroline Gabriel/Wireless Watch
08 Oct 2012

The firm has taken steps towards building a digital media hub around music and movies and creating a developer community, and the Galaxy S III came with a hugely enhanced user experience. But the firm acknowledges it has further to go, and is looking around for acquisitions to help.

The Korean giant, in the near term, is particularly focused on expanding its Music Hub offering to challenge iTunes. According to Reuters it is actively shopping for software partners and purchases, with the mobile and multiscreen sector its first target.

"The message we're getting from the top is to raise software compatibility, and buy rather than build, if needed," Kang Tae-jin, SVP of Samsung's Media Solution Center, told the news agency.

Unlike rivals Amazon and Google – and to some extent, Apple – Samsung is still definitely a hardware company. The main purpose in building a software and content business is to boost sales of hardware, by contrast with the other providers, especially Amazon, for whom devices exist to boost apps sales, advertising and revenue shares.

“Our focus on software is primarily aimed at driving hardware sales, rather than making money. We have a full range of handsets in so many countries and, to better market our products, we thought it's better to start our own software business,” added the executive.

Samsung kicked off the process in May when it acquired US firm mSpot, whose technology turned up in the Korean vendor‘s updated Music Hub, which is the basis of creating a cloud-oriented multimedia content service to run across all its devices – phones, tablets, PCs, media players and eventually TVs.

“We want to grow the Music Hub to rank in the world's top four services within three years in both revenue and subscriber numbers. And to shorten the time, we're ready to do more acquisitions, if needed,” Kang said in the interview, though he did not indicate whether this meant snapping up a string of start-ups, as Apple and Google have been doing in the digital media world, or striking out for a major purchase, perhaps of a firm like Pandora – though he did boast that Samsung has “deep pockets” for M&A because of the success of its mobile business.

There will also be redoubled marketing behind Music Hub, with more aggressive promotions and free trials, and a new-look service due to debut at the start of 2013. "We're preparing new services for launch early next year. With these offerings, people will start to think Samsung is good in software too," Kang said.

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