Samsung accelerates 'smart home' drive

By Kim Yoo-chul

Samsung Electronics is strengthening its profile in the market for “intelligent homes” by teaming up with well-known overseas and local solution providers.

It is part of its strategy to cut its heavy reliance on components and smartphone businesses.

Samsung, a global leader in hardware technologies, believes the market for “intelligent or smart homes” has a huge business potential amid an ongoing consumer shift toward a “smarter life.”

Samsung has been in talks with an audio solution provider in the United States to put the provider's premium audio and wireless home networking and entertainment solutions into Samsung home appliances.

"We are discussing with the Los Angeles-based firm to create a new ‘ecosystem’ for smart homes along with other interested parties. That American company's premium image will have a positive impact on Samsung-led smart home business projects and its image," a Samsung official said.

The U.S. electronics components maker been partnering with such Samsung tech affiliates as Samsung Techwin, Samsung SDS and S-One.

Smart homes have been around for several years in various forms, although they were previously just for high-end consumers and early tech adopters, said experts.

According to a market research firm IHS, the trend is set to change now with improving technology and competition that is making connected homes more affordable and adoptable.

It expects installations of cloud-based home management systems ― allowing homeowners to remotely control certain household functions such as unlocking doors and turning off lights ― to grow to 44.6 million worldwide by the end of 2018 from 5.6 million at year-end 2013.

The move is in line with Samsung’s shift of interest to business areas that are relatively weak but have growth potential.

Unlike, chips, flat-screens, TVs and memory chips, Samsung is a second-tier manufacturer in home appliances as the appliances market has long been dominated by high-profile firms such as Electrolux of Sweden and Whirlpool of the United States.

Samsung is one of a few which have seen a dramatic rise in demand for home appliances, boosted by its proven competence in output commitment, better pricing and on-time delivery.

Smart home solution business is viewed as one part of the appliances segment.

A senior Samsung executive said the company aims to expand its home appliances business by more than 30 percent this year from the previous year by promoting premium and budget models according to market and home automation solutions.

"We target to expand our appliances business by 32 percent in revenue this year from last year. An average annual growth rate of our appliances business have been 11 percent over the last few years, compared with the industry average growth of 5 percent," said Lee Yoon-chul, vice president at the company's appliances division in a recent meeting with investors in Hong Kong.

The annual revenue of its appliances was $4.9 billion won in 2003.

The company's appliances business is being led by President and CEO Yoon Boo-keun, who helped Samsung become the global top TV manufacturer.

Yoon's mission is clear ― lifting Samsung as the global top appliances manufacturer this year.

"Samsung's key marketing point is that because our advantage lies in technology and manufacturing, Samsung appliances can easily be connected to all Internet-enabled gadgets," said the executive.