IoT Strategies

IoT Alert: Samsung Snaps Up SmartThings

SmartThings, the home automation company founded in 2012, is independent no more. News surfaced late Thursday that Samsung has purchased the startup for an estimated $200 million.

With the SmartThings deal, Samsung Corp. nets 55 new employees, a slate of devices supporting applications like home security and energy management, and a smart home platform to rival technology from Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) and many others. On the SmartThings blog, CEO Alex Hawkinson outlined the advantages for his team.

"We believe that there is an enormous opportunity to leverage Samsung's global scale to help us realize our long-term vision," Hawkinson wrote. "While we will remain operationally independent, joining forces with Samsung will enable us to support all of the leading smartphone vendors, devices, and applications; expand our base of developers and enhance the tools and programs that they rely on; and help many more people around the world easily control and monitor their homes using SmartThings."

Major companies are approaching the smart home market from a number of different angles. Apple and Google are hoping to use their developer ecosystems to tie together devices such as connected light bulbs and thermostats with mobile applications. Retailers like Staples, Lowes and Best Buy are partnering with smart home platform companies to sell more connected devices in stores. And cable and telecom providers are rolling out new hardware and software bundles in an effort to sell broadband-based home security and automation services. (See Apple Joins Home Automation Wars and Betting on Smart Homes.)

SmartThings says it remains committed to maintaining an open platform for developers, hardware manufacturers and consumers, and CEO Hawkinson wrote in his blog post that Samsung "fully supports this vision." Regardless of how open the platform is, however, there will ultimately be winners and losers in the smart home technology market. Analysts Cesar Bachelet and Patrick Rusby with Analysys Mason believe that Samsung has an advantage over some of its competitors because it sells home appliances as well as smartphones and tablets.

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Ultimately, though, the stakes also extend beyond the home as everyone tries to jockey for position around the Internet of Things. Eventually, it won't only be light bulbs, thermostats and refrigerators that these technology platforms aim to control, but everything from cars to signs to medical devices.

Samsung already has its own IoT operating system called Tizen, but that technology has gained limited traction so far. After speaking with both Samsung and SmartThings, Re/code reported that the two companies see plenty of partnership opportunities on the horizon for the separate technologies.

It will likely take some time for the platform wars to shake out, but in the meantime, Samsung has placed itself squarely on the battlefield with the purchase of SmartThings. Expect a lot more activity on all fronts heading into 2015.

— Mari Silbey, special to Light Reading

COMMENTS Add Comment
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nasimson 9/6/2014 | 4:17:22 AM
Re: Dire @ Mitch:

> Yes, those things are all problems for Samsung. They mean Samsung does not
> control its own products.

These things ARE the powerful partnership with Google that got Samsung to the leadership position in Smartphone market. Samsung could focus on the hardware and continued to deliver two flagship models Notex and Sx every year, beating Apple on volumes & value.

If you recall Samsung's own attempt to write a smartphone OS: BADA. That failed on many fronts including but not limited to inability to attract developers to write apps. This is just one of the many areas where Samsung is reaping benefits from Google's investments.

So its not a problem. Instead it is a recipe for success. And I dont see it changing anytime soon.
Mitch Wagner 9/4/2014 | 5:18:59 PM
Re: Dire Yes, those things are all problems for Samsung. They mean Samsung does not control its own products.
nasimson 9/3/2014 | 10:26:18 PM
Re: Dire @Mitch:

> It's a problem for Samsung because Apple controls its own mobile OS.

By that logic, even Android's Playstore is a problem for Samsung because Samsunng does not control it and Apples controls its own appstore.

By that logic, even Android's Google Search is a problem for Samsung because Samsunng does not control it and Apple manages its search partnerships.

Although Samsung does get benefit out of Google Search and Andoid's PlayStore -or am I missing something here?
Mitch Wagner 9/3/2014 | 1:10:20 PM
Re: Dire nasimon - "> much of Samsung's value seems to rely on Android, which is a > platform Samsung does not control. @Mitch: I don't see why this is a problem. Dependency on Android is not unique to Samsung. It's also there for HTC and HUAWEI Mobile, and also true for LG. Thanks to Google, you don't have to code your OS to be a great smartphone manufacturer."

It's a problem for Samsung because Apple controls its own mobile OS. 
SachinEE 8/24/2014 | 10:08:53 AM
RE: Not so fast I think among other start ups that have been aquired by Google, Microsoft, Apple, and now Samsung, it clearly shows that the IOT race is beginning with major competitors at the starting positions. Moreover contrary to other acquisitions, SmartThings have got a great boost because of the wide range of market they'll be falling under the canopy of samsung.
SachinEE 8/24/2014 | 10:06:16 AM
SmartThings a third party? Although SmartThings has been acquired, would they be able to expand their business to provide third party apps to IOT hardware developers? Since they have got a huge headstart, investing by supplying applications to vendors would be a nice idea to SmartThings.
DHagar 8/22/2014 | 1:18:39 PM
Re: Not So Fast @Susan, good points.  You can win if you are competitive in your niche. 
Susan Fourtané 8/22/2014 | 5:11:29 AM
RE: Not so fast DHagar, 

Definitely. Not being the leading competitor doesn't mean they can't become more competivite. In fact, they should as the IoT market gets wider and the waters become populated by more sharks. :)  

DHagar 8/18/2014 | 2:27:52 PM
Re: Dire @bosco_pcs, you well point out the complexities they face and the waters they are going to have to navigate smoothly to get ahead.  They clearly will have to prove that they can.  But having said that, I think their recognition of the technology advantage in Smart Things does make sense - if they can manage the issues addressed; at least it suggests the opportunity.

bosco_pcs 8/18/2014 | 2:06:00 PM
Re: Dire @DHagar (& @FakeMitchWagner et al):

So the prevailing idea that Samsung will throw everything against the wall hoping something will stick is just a fabrication?

I don't know if it is desperate but it did try to replace Android with Tizen. Don't know the details but it appears it hits a snag.

While most of the non iOS vendors are using a version of Android, Samsung's latest entanglement with Microsoft (who is supposed to reap Android loyalty more than Google) seems to suggest the OS is not really free. The problem is Samsung has to compete with its Chinese competitors in China. And China is using its anti-corruption and anti-trust campaigns to make wave, Samsung is likely to be affected more than others.

To circle back to SmartThings, so what kind of IPs does it have? Could that give Samsung a leg up on the IP war? 

Ultimately, technologies alone don't spell success. Considering Samsung recent years of making partners into competitors, if not enemies, can it really continue its strategy of spreading itself thin without suffering any repercussions?
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