(Steve Kovach/Business Insider)

It was a rough year for Samsung, but 2015 isn't shaping up to be much better.

After watching profits tumble this year due to increased competition from other Android phone makers, Samsung sits at an odd inflection point. It can pump out pricey, generic Android phones and watch cheaper phone manufacturers continue to eat its lunch, or it can start innovating in software and services and find new ways to differentiate its devices from the competition.

Samsung had one plan to do the latter, but it seems to be faltering.

Reuters had a big story last week on Tizen, a mobile operating system made by Samsung that was supposed to ship on at least one phone this year. But Tizen has hit a bunch of snags, and Samsung wasn't able to release the OS on a phone before the end of 2014. (There are rumblings a Tizen phone will launch in India soon, but nothing has been confirmed yet.)

Samsung's Tizen project is a way for the company to wean itself off Android, which is controlled by Google. Manufacturers may be able to use Android for free, but it comes with stipulations, including using Google's suite of services like Gmail, Google Maps, and the Google Play app store.

That means there isn't much difference between a Samsung phone or one made by a company like the Chinese startup Xiaomi, which makes phones just as powerful as a Samsung's but sells them for about half the price. That's partly why they're now the largest smartphone maker in China.

It's companies like Xiaomi that are causing customers to buy cheaper phones instead of pricy Samsung phones, which has been devastating to Samsung's profits this year. (Xiaomi is currently the fourth-largest smartphone vendor in the world and rapidly gaining ground on Huawei, Samsung and Apple.)

Samsung's big challenge next year will be to prove that its Galaxy phones, which are wildly profitable, can offer more than the cheaper Android devices out there. Tizen was one potential answer to that problem.

But Tizen is very similar to Android. I tested an early version of Tizen at the Mobile World Congress event in Barcelona earlier this year. Here it is running on a sample Samsung phone:

(Steve Kovach/Business Insider)

It looks and function almost exactly like an Android phone. But unlike Android phones, it doesn't have the robust ecosystem of apps and services Google can provide. That makes it tough to convince people to buy one over an Android phone. It's the same thing that killed BlackBerry and has caused Windows Phone sales to remain flat. People won't buy phones that don't have access to good apps or services.