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Samsung to raise $1bn in US bonds for Texas plant

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Samsung is planning to raise a billion dollars to fund US expansion, and will be pushing Tizen onto Americans as a Bada-compatible platform, with Intel's help.

The bonds will have a five-year maturity, with the money being used to expand production at Samsung's Austin factory in a move which Bloomberg attributes to the incredibly low cost of borrowing, rather than any need for cash, from the company which has a credit rating comparable to that of South Korea.

The Texas factory makes chips rather than devices. Devices are – and will continue to be – manufactured where labour costs are lower; chip fabrication is highly mechanised, so the additional expense of using American labour isn't a problem.

But it's not just more hardware that Samsung is pushing into the USA. The company has been telling Forbes magazine that it will be creating a Bada-compatibility layer for Tizen – the Linux-based OS which has emerged from the wreckage of Nokia's abandoned offspring MeeGo, and which now has Intel's support.

One can only imagine that Intel's support is critical here, as there seems no other reason why Samsung would bother making Tizen compatible with its Bada SDK. Tizen is heavily focused on web-based applications, using AJAX with extensions from the Wholesale Application Community (WAC), which Bada is also committed to supporting (in addition to its own native applications).

But now Samsung says Tizen will support native applications developed for Bada, so the company will be supporting two separate, and compatible, feature-phone operating systems. Which makes no sense at all.

Forbes suggests that using Tizen will give Samsung more control than it has over Android, which is true, but Tizen should be compared to Bada – over which Samsung exercises complete control, much as Apple does over iOS.

Bada has been surprisingly successful, accounting for 2.2 per cent of global smartphone sales at the end of 2012 according to Garter, but it still hasn't launched in the USA.

Samsung has flirted with the idea of calling Bada "open source" – though the firm seems to have little to gain from the exercise it could well be an indication that the firm sees some marketing mileage in the term. A Tizen handset would be open source, and if it was using an Intel chip then US publicity would be assured – and if Tizen could be made Bada-compatible then there would also be a decent range of applications available for it.

But more interesting is whether Samsung will feel it necessary to retain complete control over the platform, and the applications distributed onto it – and whether Intel and/or US buyers would put up with Samsung acting like Apple. Tizen, and Bada, are intended to be able to run (AJAX) applications approved by the WAC as well as those sanctified by Samsung, so the company could claim to be backing open development while retaining exclusive control over native content distribution.

That certainly makes more sense than Samsung deciding to create an Android alternative, or wanting a new platform over which it could have greater control. If this is accurate then we'd expect to see some Tizen announcements, backed by Intel, at Mobile World Congress at the end of February, as a prelude to a US blitz in the summer. ®

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