The Software Society

How digital technology is changing our culture and economy

Samsung works to develop a technology community

October 29, 2013
[Continuing discussion on themes from The Software Society: Cultural and Economic Impact (2013), by William Meisel]

Samsung is currently holding a Developer’s Conference in San Francisco to encourage the development of apps specifically tuned to Samsung smartphones and tablets, as opposed to running on any Android-based system. Samsung is trying to create a community of devices and software that is part of a Samsung hardware-software community, an attempt to emulate Apple’s success in tying its products together and promoting a large number of Apple-specific applications. The connection between Apple’s iOS and Mac operating systems and its products is direct, since the operating systems are only available on Apple products. Since Samsung uses the Google-developed Android system, it has a harder time creating a branded community independent of the Android community.

Samsung has made other efforts to be independent from Google: Its Siri-like S-Voice personal assistant on its Galaxy smartphones is powered by technology from Nuance Communications, rather than using the Google-supplied speech recognition in Android. As part of the Developer’s Conference, Nuance is offering developers similar cloud-based speech technology specifically tailored to Samsung devices (with one million free transactions).

This effort by Samsung is part of a major trend in consumer-focused technology—technology communities—and signals Samsung’s recognition of the importance to its long-term success of establishing itself as a leader of such a community. In The Software Society, a chapter on “Technology Communities” discussed their nature and economic importance. I argued that user interfaces were a prime determinant of a community, in that ease of use and consistency across devices were a major part of user loyalty. Users, having mastered a user interface, want a new device or service to be consistent with what they have learned. This is increasingly true as the number of features, devices, and applications grow, creating user resistance to increasing complexity, what this blog has called “digital overload.”

Since device form factor and hardware strongly affect the user experience, companies are beginning to try to emulate Apple in having more control over the hardware as well as the software experience. Hence, Google, Microsoft, and Amazon, among other software-centric companies, are entering the mobile hardware battle directly.

Every community will have a dominant company driving it, unlike technology areas based on standards (e.g., basic Internet service). If that dominant company decides to deliver something itself that another partner in the community is currently delivering, that partner may find it difficult to maintain their market share. For example, Samsung may be concerned that new releases of Android may support features that are specific to Google’s Motorola phones before Samsung can support those features with its hardware. It thus wants Samsung-specific apps and features that can make its brand “sticky.”

The leader of a community also has a strong influence on new products or services that are consistent with the established components of the community. Without cooperation by the dominant company, an outside company would have trouble introducing something fundamentally new to the community.

Creating an entirely new community without an established base is a large order, as basic innovations that could create a new community don’t come often. Patents are an additional barrier to competition with an established community, as we’ve seen with patent wars that require deep pockets.

Although the focus today is consumer-oriented products, the Bring Your Own Device phenomenon is moving the importance of technology communities into enterprise software as well. Blackberry’s dropping share of the enterprise mobile phone market is an example.

A community doesn’t have to revolve around devices. Amazon has created a community around a system of online sales and efficient delivery of products. While Amazon’s original specialty was delivering physical products, it has leveraged its community to now deliver digital products such as eBooks and downloaded/streamed videos. It ties customers to its community with tools such as its Amazon Prime membership, which includes free delivery and a library of free streamed videos.

There can only be a small number of major technology communities, each dominated by the creator of the community. The long-term economic impact may be a reduction in consumer choice, as buyers are forced in essence to pick a community rather than a wide range of independent devices. Apple and Google/Android smartphone communities impacted former giants such as Nokia and Blackberry in an amazingly short period of time.

This is not to say that technology communities don’t encourage innovation outside the dominant company. Apple’s App Store, for example, makes it easy for any company with a clever app to market it inexpensively; Apple recently said that iOS app developers have earned over 13 billion dollars. And, in an effort to enlarge their community, larger companies are aggressively buying smaller companies with attractive software and services, providing a quicker route to riches for innovative startups than going public.

It’s a new reality. Communities are likely to dominate the evolution of technology. As long as there are enough competitive communities, we should see continued innovation and benefits to the consumer. But this trend, dominated by the user experience with a community, is a fundamental change in the economics of technology.

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Contact the author: b.meisel@tmaa.comMieselAUPhoto

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