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16 March 2020

Samsung is losing the smart home war to Amazon and Google

Samsung’s SmartThings appears to be stuck in a fatal lull. Samsung is forever trailing behind Amazon and Google in the smart home market.

It recently revealed to Wireless Watch’s sister service, Rethink IoT, that SmartThings now has over 50m monthly active users (MAUs), spread across 10m homes. While five active SmartThings users to every one home seems a very high ratio, the overall figures are dwarfed by Google Assistant’s 500m MAUs, announced in January.

Amazon’s smart home ecosystem also has a far larger footprint. Amazon announced at the beginning of 2019 that 100m devices with Alexa on board had been sold. It is hard to imagine there is space in the market for a third major player – and Apple is still holding on to be that runner-up anyway.

Samsung has made a few announcements this year – an app update and a partnership with Smart Car – but its energy seems to be focused elsewhere, meaning SmartThings has little chance of surviving in the smart home market long term.

Despite coming from modest, crowdfunded beginnings, SmartThings was one of the most fleshed-out smart home platforms on the market when Samsung acquired it.  Samsung was well equipped to storm the IoT marketplace. It had the right tools, a huge customer footprint, a home appliances business, and plenty of cash.

It could have leveraged its leadership position in smartphones to drive sales of SmartThings, but it never did that with the gusto of Google.

SmartThings’ total assets as of the end of 2018 were listed at $144m, making up just 0.004% of Samsung’s 2018 market cap of $326bn. Considering that Samsung paid $200m for SmartThings in 2014, it is very odd that it couldn’t manage to grow the business at least a little.

Samsung started this decade with the announcement that it was streamlining SmartThings into one app, rather than two. The only other recent announcement came from the Consumer Electronics Show where, announcing an ‘industry first’, Samsung revealed that, in partnership with Mercedes-Benz’s Smart Cars, users would be able to control their vehicle on the SmartThings platform. Smart car owners will be able to locate and unlock their vehicle, as well as check on mileage and fuel tank or EV battery levels.

Before that, Samsung announced the Work as a SmartThings Hub (WASH) program at its Developer Conference in October 2019. The hope was WASH would inspire operators and OEMs to embed SmartThings Hub software into their offerings. New capabilities for SmartThings were announced to inspire developers, including a Rules API and the SmartThings Device SDK Beta program to encourage third party development.

It was reported at the beginning of last year that Samsung would be undergoing internal restructuring in order to focus on AI, automotive and 5G. We suspected that a narrowed strategic vision might result in SmartThings being sold off or shut down. That has not happened yet, but no action has been visibly taken to suggest Samsung is trying to revitalize the brand.

SmartThings provides support for over 5,000 devices, with 203 featured products listed on its website. Amber Kappa, Samsung’s VP of strategy and platform partnerships, told RIoT that “SmartThings has the largest open ecosystem in the world. It is compatible with a wide range of connected devices and platforms – including Alexa and Google Home”.

There was a flirtation with multi-access point home WiFi when Samsung partnered with Plume in order to create open frameworks in cloud-managed home networks. The two firms pooled IP to set up an open software initiative which aimed to standardize the interface between the WiFi gateway and the cloud, so that vendors could design residential managed WiFi systems using any chips, CPE or cloud platform.

SmartThings has been a member of the Zigbee Alliance since 2015 and is a Principal Member of the Z-Wave alliance. Despite such long term allegiances, it seems to have been an insignificant addition to both.