ChatOn closure highlights Samsung's app, services woes

Buyers of its Galaxy smartphones and tablet continue to prefer Google and third party apps

Samsung Electronics continues to struggle to attract users to its own apps and services, forcing the company to focus on more on collaborating with other companies and stepping up efforts to offer better-looking devices.

Smartphone manufacturers develop apps and services to attract new buyers and convince old ones to remain faithful. However, with the exception of Apple, this has proven very difficult, even for a company with huge resources like Samsung.

Last week, Samsung announced it was pulling the plug on its ChatOn messaging app. The company also plans to shut down the WatchOn TV guide app in all countries except the U.S. and Korea on Dec. 31. Earlier this year, Samsung also gave up on its Hub line of services, including Books, Music, Video and Media, which had failed to compete with Web-based offerings from the likes of Amazon, Spotify and Netflix.

CCS Insight analyst Paolo Pescatore summed it all up by saying Samsung should be applauded for trying to develop its own suite of services -- but what it offered wasn't what customers wanted.

Samsung isn't alone in having in-house apps and services fail, though that probably won't doesn't make beleaguered mobile executives at the company feel any better. HTC closed its Watch video service this year and last year BlackBerry closed its music service.

However, the failures so far don't mean Samsung is giving up its app development efforts. Last month the company took a new stab at the video market with the launch of Milk Video in the U.S., a video service for which Samsung has partnered with Funny Or Die, Vevo and Vice.

Samsung is also hoping to make a mark in areas such as health and mobile commerce. To be able to compete with Apple Pay, Samsung is rumored to be in talks to license LoopPay's mobile wallet technology. Collaborating with a company that has a proven platform could be a better option for Samsung than developing its own products from scratch. In the wake of the closure of its apps, Samsung has in fact relied more on collaboration with companies like Amazon and Slacker for books and music.

But in the end, a lack of applications and services isn't the reason why Samsung has struggled this year as its smartphone sales dropped.

The all-plastic design of the Galaxy S5 didn't resonate with consumers and put a damper on the company's most important product. Samsung has started to make some changes with the use of metal on smartphones like the Galaxy Note 4, but it remains to be seen if that's enough. Getting the high-end design right during next year will be much more important than any services Samsung can come up with.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

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