How does ST make its money?

That’s alright. I know and respect your opinion. However, I’m willing to bet my reputation that Samsung has much bigger plans for SmarThings than just a marketing ploy. If that were the case and SmartThings had already served its purpose, it would be discarded by now (or in near future) like an old pair of shoes. I bet that is not the case and Samsung will continue invest in SmartThings specifically for their cloud technology.

P.S. Just adding a reference “from the horse’s mouth” that links Dr. Hong’s vision with SmartThings.

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As far Samsung’s work in cloud technology, have you looked at the digital health division?

The S health project app is in its fourth version, available in 70 languages including Chinese, lots of hardware partners, tons of data. Four star rating on the Google play store and a lot more downloads/ratings than SmartThings. (It also works with Samsung’s smart watch.)

Just saying they already have that expertise (reporting to the same guy you mentioned, btw).

Time will tell whether SAMI (which is used for Digital Health.) gets used for IOT or is replaced by something else. It will certainly be interesting. :sunglasses:

It’s quite possible they don’t want to mix Digital Health platform with their SmartHome platform. It makes a lot of sense to keep the two separate because the requirements and the business model are quite different and also because of potential regulatory concerns.

P.S. To my earlier point regarding the “hub as a development and test platform”, this also explains why in spite of intensive hiring campaign that started a year ago, there’s no visible progress on the hub and mobile app side. No migration tool, no USB support, no Bluetooth, etc., etc., etc. Most of these new hires most likely work on the B2B side of the platform and new partnerships like recently announces BMW integration. I’m not saying this is bad or wrong. Just trying to understand what SmartThings really is and where it’s going. :sunglasses:

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Well their problem is that if they take too long, the most likely place they will go is the trash can, or that shoe box full of old cell phones that I have, where my Google TV box from Logitech and other stuff go to die.

It’s even more dangerous for ST because their hub is really the only proprietary piece of the puzzle. People can grab their bulbs, door locks and garage door openers and hook everything up to some other HA solution, even if it’s just for testing. And the longer the platform fails to deliver consistently, the higher the chances that people will do this and potentially never come back.

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Respectfully, you’re focusing on light bulbs and door locks. This is not the primary goal of what Samsung is doing. Home Automation is just an icing on the cake. They need it to offer a complete solution to us, customers, but the real money is in smart appliances and all the e-commerce that they’re going to facilitate by leveraging the SmartHome cloud.

Current customer base is not that important, imo. If some folks leave, it’s not a big deal on a grand scale of things. SmartThings marketing is slick to be sure and new accounts are created every minute. What’s important is that their cloud technology, although quite advanced, is not nearly ready for prime time. It’s also too massive and complex to be tested in the lab. There’s simply no big enough lab to fit it in. This is what current SmartThings platform really is - a test lab for their cloud technology that one day (hopefully not too late) will power Samsung SmartHome cloud platform.

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Ok first off, no need to be respectful, because I know you’ve been around for a while so I’m not gonna take anything you say the wrong way… :smile:

Second, that’s an interesting point of view, and I had not actually considered it. Unfortunately, I’m quite familiar with the Google X approach to “if you fail, fail fast” – having gotten used to Wave, Buzz, the Nexus Q, various iterations of Google TV, Google Glass, etc.

It didn’t occur to me – in spite of the fact that it’s obvious – that we’re not really using SmartThings, as much as we’re using the Samsung SmartHome Beta. That does kind of make sense though, because you try a lot of things and cherry pick the winners, then throw out the product and release something “better” down the road.

Insidious, but actually kind of smart.

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Just as a point of reference, grocery stores operate at a 1% to 3% margin. I don’t think Samsung is salivating over what they can skim off of that.

I do absolutely believe ST is a beta platform for some future Samsung smart home ecosystem. Likely an ecosystem that is much more closed than ST is today.

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Squeak, squeak, nibble, nibble… **G-Force!**™


(Image used for illustrative purposes only; trademarks and copyrights acknowledged, blah, blah.).

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Ah, my good sir, but that’s where I believe you are missing the HUGE opportunity that Samsung is targeting…

→ People are need motivation in order to share their data, and, ideally, they get the motivation without even realizing that they are sharing valuable data!

gmail is the #1 most common free email service (actually, except for businesses, who the heck pays for email services these days?).

Folks do this because gmail is quite a well designed email system, practically unlimited storage, various APIs, tightly integrated to Android (ahem, hello “Google Now”), etc., etc…

And folks continue to use and love gmail, despite the fact that the system “reads” every one of your private conversations and uses this to (a) serve advertisements, and (b) amass incredible amounts of data that we can’t even imagine how it will be mined and used for profit.

###My point?
Well… Google has figured out how to gather user data (and serve advertisements) via their motivational “products/services” that deliver real immediate value to the user (search, email, maps, Android, Google Now, … and Nest, btw).

So every other business in the world that wants to tap into the data collection, mining, and/or advertising market desperately need to come up with unique ways to compete with Google (and other existing successful services along these lines).

Plus, in fact, there are a non-trivial set of consumers that, for various reasons, are not reached by the popular Google services – the use alternative personal email services (or no email at all), they use a “dumb phone”, they use DuckDuckGo or some other search engine, they have non-connected thermostats and smoke detectors.

Thus, the industry is desperate to find creative new ways to entice and reach consumers.

For someone that already is a multi-Google-service user, the incremental value of data from their “smart fridge” may be trivial, but for the non-trivial number of consumers that are not in Google’s grasp, and/or can be convinced to switch to a competitor (oh … hello there Microsoft – Bing, MSN, XBox, …); the value of a unique data collection and ad distribution channel (i.e., “the smart home”), is… HUGE.

Samsung SmartThings is not in competition with Control4, Wink, Vera, Zipato, Fibraro (etc.) … they are firmly and enthusiastically in competition with Google (especially Nest, since Samsung has a snowball’s chance of competing with search, email, or map products…).

And Google, well, they certainly want to win this competition. And they have the back-end expertise that will allow the Nest division to crush SmartThings. But if they don’t – frankly, Google is not desperate, since if they lose this particular battle, they can win in self-driving cars, robotics, or any one of an entire, ahem, Alphabet of ventures.

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One advantage that Samsung has over Google is that they are a hardware manufacturer. And if the history taught them nything, they’ve probably learned by now that to be the masters of their own destiny, they cannot rely on software developed by someone else. Hence, they invest in Tizen and SmartThings to be fully vertically integrated, just like Apple.

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By the way… SmartThings continues to acknowledge the possibility of Targeted Advertising in their “Privacy Policy”.

And, don’t be mistaken, per the “Terms of Use” SmartThings could change any aspect of the product at any time (only 10 days notice!); and thus, they could put advertising in the mobile App and your only recourse would be to voluntarily stop using it.

Advertisers: We may allow advertisers and/or merchant partners (“Advertisers”) to choose the users who will see their advertisements and/or promotional offers. You agree that we may provide any of the information we have collected from you in non-personally identifiable form to an Advertiser, in order for that Advertiser to select the appropriate audience for those advertisements and/or offers. For example, we might use the fact you are located in San Francisco to show you ads or offers for San Francisco businesses, but we will not tell such businesses who you are. In addition to the foregoing, if you have not opted out of our targeted advertising feature as described below, you agree that we may share your personally identifiable information with Advertisers in order to deliver specific targeted advertising or offers to you (“Targeted Advertising”). For example, we might share with our Advertisers the fact that a moisture sensor that you have connected to our Services has detected a flood in order to show you ads or offers for local plumbing services. If we enable Targeted Advertising for our users by default, you will be able to opt out of Targeted Advertising at any time by changing your personal settings.


Does SmartThings cost anything?
SmartThings reserves the right to require payment of fees for certain features of the Services. Should you elect to subscribe to such features, you shall pay all applicable fees, as described on the Services in connection with such features. SmartThings reserves the right to change its price list and to institute new charges at any time, upon ten (10) days prior notice to you, which may be sent by email or posted on the Services. Use of the Services by you following such notification constitutes your acceptance of any new or increased charges.

Will SmartThings ever change the Services?
We’re always trying to improve the Services, so they may change over time. We may suspend or discontinue any part of the Services, or we may introduce new features or impose limits on certain features or restrict access to parts or all of the Services.

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Considering potential revenues Samsung can earn by leveraging SmartThings, they might as well give the hubs away for free. Wait, they already do, by building them into their TVs and fridges. :smile:

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I think Samsung’s problem is that Google is certainly not afraid of throwing a ridiculous amount of money at a product, put it front and center in a show, then mothball it completely and pretend like it never even existed, all within the same year. They certainly had enough money and balls to do this with actual, physical things like the Nexus Q and Google Glass, not to mention that entire barge they put in the bay once which nobody even talks about anymore. They did this with Google TV, with partnerships that integrated it into an actual TV as well as standalone boxes – then they threw the whole thing out and now have Android TV and Chromecast.

Hell, they did this with their whole Android@Home concept that they touted loud and proud back during I/O 2011, then never spoke of it again and went out and acquired Nest, and have continued down that path in full stealth mode with their hub and the HA framework behind it.

The difference between Google and ST is that Google’s beta tests are much, much shorter.

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Case in point … Google buys Nest for $3.2 billion (vs. Samsung’s chump change of $0.2 billion) for SmartThings.

But even anonymized user data would give Google incredible new insights into our behavior in the physical world that its vast roster of very smart people could figure out how to leverage in order to advance its business.

Perhaps Google could pair our movements with how we shop — say, using Google’s own same-day delivery service. Or some choice we make offline that compels us to perform a particular search.

This may sound creepy, but much like using Google for search, it could become the price of admission for participation in the internet of things. Every choice we make using connected devices leaves a trace. And no one is better than Google at figuring out how to turn those traces into dollars.

Very impressed with this thread - lots of strong opinions without a single flame.

Just thought I’d throw out there… Look at Wink. I’d say that 12-18 months ago you’d have to say it was a horse race to see who would win the first generation of consumer-grade HA. Now, Flextronics owns Wink and, as far as I can tell, is wholly dependent upon hardware margins to sustain the business. I imagine that Flex is just scrambling to recover their receivables from Wink and then the platform will die.

I think the point of this thread is that ST suffers from the same dynamic (non-existent hardware margins), but Samsung has a bigger strategy for the technology or the data or the ??. It’s a cheap gambit that will mean nothing if it fails.

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Many differences between Samsung and Google. The biggest being Google listens to their customers. Their entire ecosystem is centered around user feedback and usage. Because of this, nothing they introduce is finished. While it will work as designed, the design is far from finished.

Samsung knows better than their customers (at least in their mind). They release finished products, but often with significant flaws. If the product is successful, flaws will be addressed in the next big thing, but rarely to the initial product.

Google’s ecosystem is not only the ideal one for IoT based HA, its infrastructure is the best in the world. I have no doubt they will eventually get this right. But strictly on their schedule.

Samsung however… it will be hit or miss; with a lot of misses. Their software team has always been a bit clueless, so they will most likely have to buy their way into market (as they have started with SmartThings). Unfortunately, it is far easier to muck up someone else’s tech than your own. And to get it to all play nice together takes tremendous vision; IMHO, a very short commodity in Samsung’s organization.

Samsung is a huge company, and U.S. consumers do not generally reflect the average Samsung customer. They are, for example, huge in appliances, but sort-of an also-ran in the U.S.

Additionally, Samsung’s divisions don’t talk to each other well, and often don’t even get along. About 15 months ago, I was in a conference call with the newly-combined CE and Phone divisions. The Samsung callers would briefly chat with us in English and then start yelling and cussing at each-other in Korean for extended periods of time. It was a remarkably uncomfortable conference call.

I suspect SmartThings is really a gamble by Samsung that they can, with an injection of outside blood and ideas, jumpstart the integration of their appliances, CE (televisions) and phones/tablets to seduce consumers into a Samsung ecosystem. Remember that the TVs run Tizen now, which Samsung is still betting on despite the lack of uptake on phones.

So SmartThings could make a loss as a division and still be profitable for the company, if it’s viewed as a highly-successful marketing campaign. In other words, assume that 80% of Samsung appliance purchasers and 40% of Samsung TV buyers buy a different brand on their next purchase. But users of SmartThings who have integrated them change those numbers to 25% and 10%. That’s a HUGE reduction in “churn”. That loyalty is worth a huge amount of money. That delta - that 55% increment in appliance retention (or over three times increase) is worth a huge amount. If ST is credited that increment, they’re suddenly quite profitable without actually charging anything.

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And, they don’t have to make it work right. The service is free. It doesn’t matter if it works right, all long as the marketing bump works for Samsung.

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I once worked on a joint project with another Korean electronics giant and had similar experience. Their work ethics are quite different than in NA, but one thing is sure, they are very ambitious and aggressive (in a positive sense). :smile:

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I just looked at Samsung’s Q4 earnings report published yesterday and they don’t even mention Smartthings or “Home Automation” anywhere in the report. I agree with others (e.g. NWTony) who have said something to the effect that it is likely a stratgegy to imrove sales or margins in other product lines. If Samsung can create tigher integration between, tablets, smartphones, TVs, and appliances, it certainly gives them an ecosystem that might make some customer a little more sticky to the brand…

Also, I wouldn’t think that their bleeding cash either. While I don’t see much to be made on the hub, I can’t image that the $40 sensor (that I bought 10 of) costs them much more than $5 or 10 to produce in mass quantity in China.

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