How Samsung is fostering growth in its Galaxy Apps store

Samsung is a giant global technology company. But when it comes to running its own app store, the company is operating in the shadow of Google and Apple. Those companies have more than 3 million combined apps and are paying billions of dollars to developers who are selling apps via their stores.

By contrast, Samsung is just getting started with its Galaxy Apps store. The job of making Samsung’s app store, which is present on every one of its smartphones, grow more falls on Mihai Pohontu, vice president of emerging platforms at Samsung. Mihai outlined Samsung’s plan for growing its platform for developers — from the app store to the Samsung Gear VR apps — in a conversation with Greg Short, president of Interactive Entertainment Partners, in a fireside chat at our recent GamesBeat 2015 event.

So far, so good. The Galaxy Apps store has grown its traffic from six million monthly active users seven months ago to 14 million monthly active users today. It has done so by curating the apps that it believes users want to play.

Here’s an edited transcript of their conversation.

GamesBeat: A lot of people may not know who you are. Do you want to tell us a bit about your background and your role at Samsung?

Mihai Pohontu: I manage a team called Emerging Platforms. At Samsung we develop amazing devices, amazing products. Our team’s mission is to put amazing software on them. You can express this in different ways. Our mission is also to support the developer ecosystem around Samsung hardware products.

We do this in several ways. We have a developer outreach team that organizes developer events, conferences, tutorials, workshops, where engineers teach other engineers how to write software for our platforms. We have a team that publishes content to our app store in the U.S. We also perform device optimizations for various partner applications. We have a production team that engages with external developers to build unique exclusive experiences for our product line. Last but not least, we have an operations group that offers internal and external developers a full range of development services.

Above: Mihai Pohontu (left) of Samsung and Greg Short of IEP at GamesBeat 2015.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: So a lot. You’re doing a lot, is the takeaway there. My question is, why? Why go to such great lengths to offer all these services to developers, since you’re basically a hardware manufacturer? Is there a particular problem you saw that needed addressing?

Pohontu: We think about products as a complete experience. We care what our customers think and feel when they use one of our products. Software is an integral part of that experience. That’s why we created this complex, multi-dimensional teams to cover all aspects of interacting with developers and producing unique content around our product line. The ultimate objective is offer Samsung customers something unique, something they can only find on our devices.

GamesBeat: When I was looking at the app store on my Samsung phone, I noticed that the featuring is pretty prominent. Have you heard from people that this is a specific benefit to them from a discovery standpoint? Why are developers interested in getting into the dedicated store?

Pohontu: The app store is a key part of our strategy to engage developers. Our aim is to create a vibrant marketplace that offers developers a real return on their investment by publishing their wares through our store. Our aim is not to compete against the established app stores, but to offer a new discovery experience.

Our store is invite-only. It aims to only onboard high quality content. We have a certification system that ensures the particular apps or games are optimized to our devices and are of the highest quality. That’s our drive, to provide an outlet for Samsung customers to get great content that works great on their devices, but also have an outlet for unique experiences developed either by Samsung or Samsung partners specifically for our devices.

GamesBeat: If it’s invite-only, does that put the bar up pretty high? Does that exclude indies? Who decides who gets invited?

Pohontu: We have an ideological bias toward indie developers, actually, in games and apps alike. We’ll regularly feature content provided by startups and small teams. We’ve started a partnership with Pocket Gamer to curate indie game content, because Pocket Gamer has a unique focus on that. If you look on our app store today, you’ll find a banner featuring that kind of content, and we hope to onboard more.

We want to get the word out. That’s part of the reason we’re here today, to tell people that this app store is probably the best-kept secret in the industry. We’ve had a phenomenal run in the last seven months. Our traffic has increased from six million MAU to 14 million MAU. Clearly our customers are responding to the way we’re merchandising the store today. They’re responding to the value proposition. Again, we’re offering something unique, something they can’t find in the democratic stores.

GamesBeat: If I have access to that many MAU with a dedicated banner, I’m interested, given the cost of traditional UA. The other part of it, though — if I get into this store, what do you know about these users? Do they spend more? Are there any demographics to help people understand the users they’ll get if they get featured?

Pohontu: Samsung customers are particularly good customers in the Android ecosystem. Samsung customers overindex on revenue generation. They monetize better than standard Android users. If you’ve seen our devices of late, we’re inhabiting the high end of Android. We’re also the dominant player in the Android space overall.

We obviously only represent the U.S. team. But once you onboard your content into Galaxy Apps using our servers, you can be featured worldwide. The infrastructure that sustains Galaxy Apps is the same worldwide.

Above: Mihai Pohontu of Samsung (left) and Greg Short of IEP at GamesBeat 2015.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: Is the long-term play here to become another iOS? Are you looking to get into the 70-30 split market?

Pohontu: It’s absolutely not the goal. The goal for us is not to enrich Samsung. First of all, we’d like to make sure this is a vibrant marketplace where developers make money and generate traffic for their apps. That’s the most important objective for us. Beyond that, our drive is to create this differentiated software ecosystem. One more step beyond is to please our customers. The focus is always on the customer. We’re happy to feature developers that create either exclusive or differentiated experiences.

GamesBeat: Can you give an example of an experience like that?

Pohontu: I mentioned that we have an internal team in my organization that co-develops apps with external partners. We recently announced a partnership with CNN where we build HD news experiences. It’s the first 1080p streaming news application that we’ll be launching on our devices. The video is beautiful. You can access news and TV series that CNN publishers.

Another example would be our work with Expedia. We’ve created an exclusive travel discovery experience, which is a departure from the norm. Expedia is normally seen as an online booking utility, but they’ve created a discovery experience where you can find beautiful locations around the world and peruse them through high quality images and video.

There are very established brands, but we’ve also worked with startups like Muse Republic, creating a personalized music experience. We’d love to work more with game developers to create games content in the same type of co-development scenario. That could mean some type of exclusivity, but it can also mean differentiated features, or trying to work with our engineers using Samsung technologies to create an implementation of the Samsung SDK that enhances the game experience.

GamesBeat: You have 40 million people coming to your dedicated app store every month. It’s indies. It’s a high quality selection. This all sounds very good. But how many people can go through your process at once? A lot of people may want to get in. How can they engage in this process?

Pohontu: I’m here, so you can always talk to me. That’s part of my job. I’d love to onboard more games to the store. Obviously we have a large team and I can help you connect with the right people, depending on what you want to do with Samsung.

One of our core missions, nurturing and supporting the developer ecosystem, is really about showing you a way to work effectively with Samsung and generate ROI and monetize effectively. We have various programs that will help you achieve that beyond featuring, assistance of many kinds. If you work with us to create an optimized experience for our devices, there may be some additional incentives we can throw in the mix. We’re a very large organization. We spend tremendous effort and money on marketing. Hopefully we can integrate you into those efforts as well.

Above: Samsung Galaxy Apps

Image Credit: Samsung

GamesBeat: From the featuring perspective, anything you can provide details on there — is it a one-time deal? Is it a rotational piece? What does it mean to be featured in this store?

Pohontu: We refresh the store every week. It’s a case by case basis. We’ll feature different products. The standard featuring is usually one week, but often our partners will be featured far longer than that, depending on how different their product is, how well it’s performing in relation to our featuring objectives at any given time.

Our long term vision for featuring decisions is to separate our editorial team from doing that. When I said that we want to be a complementary experience to the traditional stores, I meant that. We want to have 3,000 to 5,000 apps, and we’ll regularly purge underperforming apps. We want to effectively be a boutique store, a highly selective environment.

Within that environment we’d love to work with the likes of GamesBeat and Pocket Gamer to provide the editorial substance that sustains the store. We’d like to have a transparent editorial policy. We can trust the luminaries in the industry to show us what’s the best content available. Obviously we have a while to go before we get there, but that’s the vision.

That’s why I mentioned our ideological bias toward indies. We think the type of content indies produce is often lost in the traditional stores, but it will not be lost in a store that deliberately tries to limit the number of apps and is very selective in identifying those products.

Above: Mihai Pohontu, vice president of emerging platforms at Samsung

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: Are there any specific success stories you can share? Have people come back and said that this really works?

Pohontu: We have a series of game partners that we’re happy about, including Game Insight, which is very prominently featured at this conference. We’re absolutely thrilled to be working with them. We’re also thrilled to work with well-known publishers like Gameloft and EA and so on.

On the startup stage we’re collaborating with an accelerator in the Valley called Plug and Play, probably the largest accelerator in the Valley. They’re incubating about 300 companies simultaneously at any one time. We’ve created a category for them to be able to feature the work these startups are producing. It’s a very exciting proposition, an ideal way to feature what we want our storefront to be all about.

GamesBeat: Obviously Gear VR is ramping up for a pretty big end of year for you guys. Does this interact with your store at all? Are there separate stores? Can people in the VR space benefit from working with your team?

Pohontu: The game store in Gear VR is Oculus. We’re working very closely with Oculus. We’re happy to have that partnership. Also, as a side note on VR, we’re very happy with the fact that Gear VR inhabits a unique space in the VR ecosystem. It’s the only mass market device currently on the market and it probably will be for some time.

It’s effectively the only subsidized VR model. The phones you get will be subsidized by carriers in some fashion if you sign up for a two-year contract. The support, the goggles, are very inexpensive at $99. These phones, even though they can’t deliver the same experience that the full-fledge Oculus device will, it’s nevertheless a workable, functional VR experience. As a casual user, you’ll definitely get your money’s worth from that engagement.

Now, we do have a separate store for VR. It’s currently primarily geared toward content like video. Some music will be there in the future. This is what we’ve prioritized in the past. But we could potentially open it up to games as well.

GamesBeat: Discoverability is a problem for everyone these days. There are millions of apps, so how do you find one? If you could paint a picture of two or three years from now, what is the app store delivering to consumers, and what is it delivering to developers?

Pohontu: To consumers it delivers a fabulous panel of exclusive experiences that they can only find within the Samsung ecosystem. It’s a destination that’s prized and valuable. To developers it delivers a legitimate way to monetize your wares and realize the potential of your art. That would please us immensely.

Above: Ravi Belwal, Mihai Pohontu, and Johanna Penttila of Samsung

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: Are you working with publishers or venture groups that have multiple products they’re supporting, looking at higher-level strategic agreements, or are you still working on a developer by developer basis?

Pohontu: It’s always a developer by developer engagement. Even with publishers, we may talk to larger teams, but it’s still very much an engaged conversation. We’ve done this very successfully in the past. Quite a good number of developers and publishers have already come into the store, but I really think this is still virgin territory in the sense that — the traffic figures I announced today aren’t well-known in the industry, but they are significant and they’re growing very fast.

Since the U.S. team started merchandising the store according to the new approach I’ve just discussed, we’ve found very good traction. We benefit enormously from the fact that we’re preloaded on Samsung mobile devices.

GamesBeat: How big is the market? How many Samsung devices are there?

Pohontu: Samsung sells 30 million devices in the U.S. every year. That’s the market penetration that we’re looking at. As far as installed base, devices in the field, we’re at about 80 million active devices that have the store on them.