tizen-smartwatch-OS-market-share-2017

The Tizen OS from Samsung Electronics Co Ltd (KRX:005930) was launched to much fanfare back in early 2012. At the time, the market welcomed Samsung’s new venture into mobile OS and hoped that it would, in time, become a viable third alternative to Android and iOS. Unfortunately, in the five years since, Tizen has not really managed to take off as a smartphone OS. However, Tizen seems to have found unlikely success on another platform – the smartwatch.

Samsung started outfitting their Gear line of smartwatches with Tizen instead of Android with the Gear 2 in 2014, and they have not looked back. A new report by Strategy Analytics now proves that Samsung’s gamble has paid off. In a short time span of around three years, Tizen has now overtaken Android Wear in terms of global Smartwatch shipment share.

Indeed, it’s an interesting development, but what is more interesting is to find out the driving factors that helped Tizen leapfrog Android in Smartwatch space. Let us have a deeper look and dissect how Samsung managed to one-up Google themselves.

Tizen Exceeds Expectations

As a smartwatch OS, Tizen has continually exceeded industry expectations. A new report by Strategy Analytics reveals a pleasant surprise for Samsung. In Q1 2017, Tizen accounted for nearly 19% of global smartwatch shipments. This is 1% higher than Android Wear which now lags behind at 18%. This is the first time ever when Tizen has managed a larger shipment share than Android Wear. This achievement is even more impressive when we consider that there are only a few Tizen-powered smartwatches compared to numerous Android Wear devices. While afflicted with a slow start, Tizen has now picked up momentum and is fast acquiring market share.

Between 2015 and 2016, Samsung’s Tizen had almost doubled its market share, according to the IDC report. From mere 6.7% share in 2015, the market share of Tizen smartwatch OS swelled to 12.7% in 2016. On the other hand, during the same period, the market share of Android Wear increased to 22.9% from 17.4%.

How Tizen Took Down Android Wear

This surprising new data begs some introspection. How did Samsung manage to make Tizen a runaway success? How did it take down Google itself, despite negative industry perceptions and expectations?

  • Cross Platform Compatibility – Samsung’s decision to enable compatibility for Tizen-based smartwatches with other operating systems has paid off big time. Samsung now allows its Gear smartwatches to pair with Android smartphones and even iPhones. This was a very clever move as Tizen does not have the gigantic user-base that Android or iOS has.
  • Innovative Features – In typical Samsung fashion, they have loaded the Gear smartwatches with a plethora of features not found with the competition. They are one of the few smartwatches available that offer LTE connectivity. They can also track steps, calories, distance, and sleep and heart rate activity along with caffeine and water intake. This makes them double has great fitness trackers too.
  • Unique Hardware And Design – It seems like Samsung has taken their design expertise from their acclaimed Galaxy smartphones and implemented in Gear smartwatches. The rotating bezel and sleek modern design make it a very appealing proposition for users. This has, in turn, spurred Tizen’s popularity
  • Top Notch Specs And Battery Life – The newer Gear smartwatches have one of the best smartwatch displays on the market. The AMOLED display not only looks fantastic, but it also helps preserve battery life. This along with Tizen’s better battery management gives Tizen smartwatches superior battery life than its Android Wear counterparts (as much as 2-4 days!). This is a huge selling point as poor battery life is usually a deal breaker when it comes to smartwatches.
  • Integration With Galaxy Smartphones – The Galaxy line of smartphones are some of the most popular on the market. The deep level of integration with Gear smartwatches is a compelling purchase driver for many Galaxy smartphones owners.
  • Samsung Pay – Perhaps the most relevant feature to Tizen’s success is Samsung Pay. The mobile payments feature allows users to pay from the wrist by way of MST (Magnetic Secure Transmission) technology, eliminating the need for NFC-only terminals. In contrast, Android Wear, as well as the Apple Watch, only provide NFC. The growing popularity of Samsung Pay is surely one of the driving factors behind Tizen’s success as a smartwatch OS.

Challenges Ahead

Despite the stellar performance in Q1 2017, there are many hurdles before Samsung and Tizen. For all their improvement, they still severely lag behind the Apple Watch which dominates with 57% of the global shipment share. It also accounted for nearly 80% of all smartwatch revenue in Q4 2016. The upcoming Android Wear 2.0 will also provide a significant challenge to Tizen, as Google look to hit back.

But, not all analysts are quite so optimistic for the future of Tizen. Analysts at research from IDC don’t see a favourable forecast for Tizen, with estimated shipments of only 3.8 million by 2020 at 9.4% 5-year CAGR. In fact, analysts expected Android Wear to thoroughly thrash Tizen with 22.8 million shipments by 2020 at a 44.4% CAGR! This would account for nearly 41.8% of the smartwatch market by then.

While the year 2017 is dubbed to be the most innovative year in terms of smartphone and smartwatches, it would be interesting to see how things unfold.

Actionable Insights

  • Tizen went against industry expectations and beat Android Wear. With some OEMs abandoning Android Wear, they may look to adopt Tizen as their smartwatch OS of choice.
  • One of the driving factors behind Tizen’s popularity is its wide range of features. Battery life and fitness tracking features, especially, seem to appeal to users.
  • If Gear smartwatches continue to gather steam, it may help speed up Tizen adoption and development in the smartphone space too. This could make Tizen a direct competitor to Android and iOS.
  • Tizen faces fierce competition from the Apple Watch and the new Android Wear 2.0. Analysts are predicting a higher shipment share for Android Wear in the next three years at the expense of Tizen and the Apple Watch.