tgauchat
December 6, 2015, 11:06pm
28
rando:
I am not entirely sure how the smartthings model is going to work out. As you said, we buy a $99 hub from ST once and then expect support from them for eternity there after. This does not seem like something that is going to work out in the long term. This is one of the reasons I generally have not emailed support to deal with my (many) issues. I bought my hub and a few sensors from ST almost 2 years ago, and haven’t bought anything from them since - I don’t think they owe me any support any more. I almost wish this was a subscription service - say $8 a month like Netflix.
You’re probably correct … though some folks think that in sufficient quantities (millions of units sold), even a low margin on a $99 hub could sustain the SmartThings division of Samsung.
But join in other speculation discussion…
There have been a lot of threads complaining about issues with SmartThings lately.
I too am not a completely satisfied user.
I struggle with the long-term viability of the SmartThings model. I keep hearing people talk about how other solutions cost more, or require monthly fees, and everyone talks about how SmartThings is better in that regard. But, think about this.
You spend $99 on a hub. Since that hub will work with generic Zigbee and Z-Wave devices, in theory, that is all you have to give SmartThings, and in return, they promise to give you a cloud-based Home Automation solution forever.
So, hypothetically speaking, if SmartThings makes $10 profit on every hub (not very likely.) and they have 5 employees making $100,000 per year, they have to sell 50,000 hubs every year just to pa…
Good comment; but I’ve quoted the key part of your post.
SmartThings (a subsidiary of Samsung Inc.) exists to make money. It is not a charity, it is not an Open Source company. The profit margin from hardware sales (especially just the hub) is pretty small. On the other hand, the premium added to the price of an appliance (such as a Samsung Refrigerator) gained by just adding a low resolution slow tablet and WiFi (sub-$100 cost of materials) is quite high.
But neither of those compares to the profit they hope to make by selling integration (device handlers and apps), partnerships (integration with home security and home insurance companies, fitness, … who knows?), and aggregation of our data for marketing purposes (since marketing / advertising is obviously where all the money in the wo…