Samsung to buy its way to software goodness

South Korean electronics giant aims to bolster content for its mobile devices by shopping for software companies, particularly those offering mobile music services, and one analyst believes this is "necessary".
Written by Kevin Kwang, Contributor

Samsung Electronics is now on the lookout for mobile software companies that it can acquire to strengthen the content proposition it offers to customers beyond what is available on its popular mobile devices such as the Galaxy series of smartphones and tablets.

Reuters reported on Thursday the Korean electronics giant will be buying its way into better competing Apple, Google and Amazon.com in the digital content space, particularly in the music market which is worth nearly US$9 billion.

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

"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," Kang added.

The company had in May bought mSpot, a U.S. mobile company, to boost its cloud-based entertainments services including music, video and radio offered on its devices. It subsequently built its own Music Hub service to compete against Google Android's Music Player, Apple's iTunes and Amazon's Cloud Player, the report noted.

"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, though he declined to name potential targets.

He added the mobile business is doing really well for Samsung and this means it has "deep pockets" for future purchases.

The executive also said while pre-installing Music Hub service on Galaxy devices is powerful, it is not enough. As such, the company will be more aggressive in promotional efforts, including month-long free trials and give-away albums to users.

"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.

Jessica Kwee, research analyst at Canalys, told ZDNet Asia the decision for Samsung to build up its software portfolio as a "necessary move" since it needs to differentiate itself from competitors beyond hardware.

"With content, it can loc up its customers further [although] making content such as music available in all countries is not that easy," Kwee added.

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