A report emerged yesterday in Korean media alleging that Samsung plans to fit chargers, smart covers, and other accessories with ID chips, in order to curtail the sales of unofficial accessories.
Now ETNews returns with an English language report that sheds a bit more light on what’s going on. Note that, to our knowledge, Samsung hasn’t yet confirmed or denied the information in the reports, so we treat it like a rumor for now. We’ve reached out for comment, but haven’t heard back so far.
Accessories lacking the authorization chip won't work
Samsung has reportedly already kicked off the plan to put ID chips in accessories, with the Note 3 being the pilot device for the program. ETNews cites industry sources saying Samsung has already distributed authorization chips to its own accessory making unit and suppliers and made their installation mandatory. Smart covers or wireless chargers that lack the chip won’t work as intended, but it’s not clear what other types of accessories will be fitted with chips.
But why would Samsung take this radical step? The phone maker is reportedly planning to develop its own accessory business, at a time when market saturation has dampened revenue growth in the handset business. Unlike smartphones, Samsung can reap relatively high profit margins from accessories, which is why the Korean giant is doubling down on the business. To boost accessories sales, Samsung is even considering stopping bundling a second battery or earphones with its devices.
Understandably, Samsung’s move worries small accessory makers, who have to compete for a place on Samsung’s supplier roster or otherwise give up the business. It’s not clear whether Samsung will have a licensing program in place for partners.
For consumers, the effects may be a mixed blessing – removing third-party manufacturers from the market will increase prices, but on the bright side, the quality of accessories may increase. In theory, the number of accidents caused by faulty or improper accessories should also drop.
If the report turns out to be accurate, Samsung may face some serious backlash, similar to the negative reaction to the regional locking of the Note 3. Nevertheless, the Korean conglomerate seems determined to get an iron grip on all aspects of its business, at a time when continued growth is no longer guaranteed.