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Samsung buys SmartThings to build home platform

Korean giant aims to take on Apple and Google with smartphone-based hub to connect home devices and apps

By CAROLINE GABRIEL

Published: 18 August, 2014

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The battle to snap up smart home assets will continue to build throughout the fall, and Samsung has called the latest shot with the acquisition of start-up SmartThings.

The smaller firm's platform enables users to control a wide variety of home devices via a smartphone application and a physical hub. This does not, on the surface, sound too different from many other solutions for keeping our homes perfectly automated and optimized, and reflects how the major phonemakers are seeking to put the handset at the center of the home, not just the mobile, experience.


But Samsung is reported to have paid $200m for SmartThings, so it must be offering something distinctive. Most obviously, it will help the Korean giant catch up with Apple and others in laying the basis for an offering which will embed itself into the whole home ecosystem, integrating different applications, protocols and devices behind its own user experience and development tools. Importantly for Samsung, this could enhance several of its core businesses - mobile, TV and home appliances - and bring them closer together. This in itself could create efficiencies for a firm which has sometimes been criticized for failing to build on the synergies between its activities. And of course, appliances such as washing machines are one area where Apple and Google cannot play.

Two-year-old SmartThings brings its new parent a team of 55 people; a range of devices and apps for home security, energy management and other home-oriented tasks; and most importantly, the underlying platform. Its products are in the early stages, but it has been developing business models based around app stores, freemium software and revenue sharing with developers - all of which will require scale and reach.

CEO Alex Hawkinson wrote on a corporate blog: "We believe that there is an enormous opportunity to leverage Samsung's global scale to help us realize our long term vision."

He insisted - like Google's Nest before - that his firm will "remain operationally independent", and that the platform will remain fully open. "The proof is going to be in the pudding," he wrote. "The vision is still the same. To be completely easy for the consumer and open and be the most open over time." Indeed, the large brands know they will have to achieve a tricky balance between the openness which will be essential for scale and developer support, and keeping control of the user experience and the key revenue streams. Even Apple, with HomeKit, is showing holes in its garden walls, and Hawkinson told GigaOM: "Clearly the closed model doesn't work. If Tony [Fadell, the CEO of Nest] couldn't keep it closed no one can."

But he added that "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".

Samsung's ownership will get SmartThings involved in a broader ecosystem and give it entry to, and greater influence over, emerging standards efforts. For instance, the Korean firm is part of the Open Innovation Center and the Nest-driven Thread Alliance as well as having a loud voice in more formal standards bodies like the IEEE.

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