Log Angeles/ Seoul: All Samsung Electronics Co. products will be Internet-ready within five years as Asia’s biggest consumer-electronics company focuses on the growing businesses of smart homes and smart cars.
The world’s biggest maker of TVs will only sell Web-connected sets by 2017, co-chief executive officer Yoon Boo Keun said at the Consumer Electronics Show in Las Vegas. Samsung also will invest more than $100 million in developers this year to accelerate its plans, Yoon said.
Samsung is reinventing itself as a purveyor of Internet- connected appliances and wearable devices to grab share of a market that may be worth $7.1 trillion by 2020. The changes come as the controlling Lee family shifts to a new generation of leadership and as earnings plunge because Galaxy smartphones are being squeezed by devices from Apple Inc. and low-cost Chinese competitors.
“The Internet of Things has the potential to transform our society, economy and how we live our lives,” Yoon said. “It is our job to pull together—as an industry, and across different sectors—to make true on the promise.”
The Suwon, South Korea-based company is also developing more advanced sensors and chips for a broader range of Web-enabled mobile devices, including wearables, he said.
At the show, Samsung unveiled more curved ultra high definition TVs and announced a collaboration with 20th Century Fox to provide content. The company said it would expand its Milk entertainment services to Internet-connected TVs, and debuted a virtual-reality video service.
All of Samsung’s Web-connected TVs will use the Tizen operating system, with the first models going on sale next month.
Yoon forecast a world in which a device will tell you when to watch your TV, warn you when your house’s plumbing stops working and constantly monitor your health. “Each of us will be at the centre of our very own technology universe,” he said during his keynote presentation.
Yoon welcomed several partners to the stage, including Hosain Rahman, the chief executive officer of Jawbone, a company that specializes in wearable technology, and Alex Hawkinson, chief executive officer of SmartThings, an open platform that helps consumers customize their homes across connected devices.
SmartThings, which Samsung agreed to buy in August 2014, will offer a subscription service that sends phone alerts whenever there is a problem at home.
“We’re now compatible with more devices than any other smartphone platform in the world,” Hawkinson said.
Samsung will extend its efforts to the car after reaching a deal with Bayerische Motoren Werke AG to install Samsung tablet computers as touch command screens in some models. The presentation included a demonstration of how to communicate with a car using a wristwatch.
Samsung is facing its strongest challenge to leadership in smartphones, with the company posting the smallest quarterly earnings in more than two years. Operating profit at the mobile- phone unit, the company’s biggest cash generator, slumped 74% in the September quarter and sales fell about 33%.
Xiaomi Corp. last year overtook Samsung as the biggest smartphone vendor in China and the Beijing-based company trails only the Galaxy maker and Apple in global shipments.
Operating profit at Samsung’s consumer-electronics division, which oversees TVs and appliances, probably dropped to 250 billion won ($226 million) in the fourth quarter from 660 billion won a year earlier, according to the median estimate of six analysts surveyed by Bloomberg News. Preliminary earnings results may be announced on 8 January.
In the third quarter, the unit’s profit dropped more than 80% because of falling prices and competition with Japanese and Chinese producers.
Vice-chairman Lee Jae Yong is helping oversee Samsung’s transition as he takes more of a leadership role since his father, chairman Lee Kun Hee, was hospitalized in May.
Samsung last year transferred about 500 engineers from its mobile-phone division and allocated them largely to the Internet initiative, people familiar with the matter have said.
Separately, the company’s challenger to Google Inc.’s Android software is moving from phones to big-screen TVs as Samsung tries to get a head start on controlling Internet-connected devices in the home. Samsung this week unveiled the first sets powered by Tizen software at CES and said all the Web-connected models it sells this year will run the operating system. Bloomberg
