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Friday, April 26, 2013

An Uncertain Lure for Samsung’s Digital Store

With the release of Samsung’s Galaxy S4 smartphone this weekend, the company will open a digital store that offers music, video, games and books.

But even though Samsung is the biggest seller of phones in the world, it’s far from certain that its store will pose a serious challenge to those run by Apple, Amazon and Google.

Inside the store, called Samsung Hub, customers will be able to flip through content in a magazinelike format. For music, for example, users can find and download songs and upload their own music library to an online locker, where Samsung will scan and match the library with songs in its own catalog so users do not have to repurchase them. (That’s similar to Apple’s matching service, iTunes Match.)

Although Samsung has found success selling devices and accessories, it has little experience in e-commerce, and technology reviewers have said it is especially weak in designing software. It’s uncertain whether people will feel confident about buying digital content through a Samsung store.

“They are less strong than Apple or Google when it comes to content, media, applications, getting developers to write applications,” said Charles Golvin, a mobile analyst at Forrester Research.

Mr. Golvin said that Samsung was at a disadvantage because it was opening its store long after the competition. And its top rivals have particular strengths: Apple’s iTunes Store is extremely successful with music, Amazon dominates the e-book business and Google Play has become a vibrant destination for downloading Android apps.

Consumers make investments of time and money in ecosystems that make it harder for them to leave a company’s products, Mr. Golvin said. For example, people who bought a lot of books from Amazon for a Kindle device will be unlikely to want to buy e-books elsewhere.

“If you’re a glass-half-full person, it’s loyalty, and if you’re a glass-half-empty person, it’s lock-in,” Mr. Golvin said. “In order to secure the greatest possible loyalty or lock-in, you need all of those components working in your favor.”

Samsung’s relationship with Google in particular is growing more complicated by the day, Mr. Golvin said.

“Google is to some extent reliant on Samsung as the dominant seller of Android phones,” he said. “At the same time, Samsung is reliant on Google for the larger Android ecosystem, people building Android apps and delivering them through Play.”

Samsung Hub will be a direct competitor to Google Play. Mr. Golvin said either company’s next move could be equally competitive.  Samsung could strike out on its own, using a platform called Tizen instead of Android. Or Motorola, owned by Google, could make Android phones that rival Samsung’s.