Samsung Predicts Tech Will Next Transform the Home: WSJ D.Live -- Update

By Tripp Mickle Features Dow Jones Newswires

LAGUNA BEACH, Calif. -- Samsung Electronics Co. is betting that the next domain to be transformed by technology will be the home, and it is increasingly investing in artificial intelligence and software startups to stitch together a network of smart appliances.

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"We think this could be the third wave where you have programmable objects blanketing your home," said David Eun, president of Samsung NEXT, Samsung's investment group, during an interview at The Wall Street Journal's WSJ D. Live technology conference.

Companies across tech have been rushing to launch products and software for the so-called smart home. Amazon.com Inc.'s Alexa and Alphabet Inc.'s Google Assistant have made it possible to embed artificial intelligence in everyday home devices, letting people unlock doors and dim lights with their voices. Those companies and Apple Inc. are launching smart speakers, as well.

Samsung has an inherent hardware advantage in this arena because it sells an array of appliances. Mr. Eun said the company's recently launched digital assistant, Bixby, would likely play a role in Samsung's push into the home, becoming a gateway for not only its Galaxy smartphones but also TVs, refrigerators and other products.

"We think about it as a service that can connect and be accessible through all the devices in your home," Mr. Eun said.

Created in 2013, the Samsung NEXT investment fund is at the forefront of Samsung's effort to build a software platform that can work across hardware products from Galaxy smartphones to refrigerators. It has invested in 60 startups working on the Internet of Things, augmented reality and artificial intelligence.

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The venture is unusual for Samsung. The company didn't have a record of investing or acquiring software companies before hiring Mr. Eun. Indeed, it has faced criticism for allegedly borrowing technology from rivals. Apple Inc. sued Samsung over patent infringement in 2011, accusing it of ripping off the iPhone's design. The U.S. lawsuit remains unresolved.

Though Samsung invests more than $13 billion into research and development annually, Mr. Eun said Samsung NEXT is helping the company identify new software before the company adopts it. He pointed to an investment in a virtual-reality startup as an example, noting that the stake was taken two to three years before Samsung developed its own virtual-reality headset.

"What you need in the future to continue to grow and thrive as a company is thoughtful integration" of hardware and software, Mr. Eun said.

Mr. Eun said that Samsung had bounced back from the faulty battery issue that caused it to pull its Galaxy Note 7 devices from the market last year. He said that the recent launch of the Note 8 in New York City "was an affirmation for the company that you can't take anything for granted."

Though the company is on track to deliver record profits this year, it has been beset by leadership questions. Samsung Electronics Vice Chairman Lee Jae-yong was convicted of bribery earlier this year.

Mr. Lee is "the visionary who really was driving the transformational change of the company," Mr. Eun said.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

October 17, 2017 20:11 ET (00:11 GMT)