Vertical IoT
Samsung Electronics is building a strategic cooperative network linking South Korea, the U.S., and Europe in order to enhance its competence in the Internet of Things (IoT) sector.
Samsung said that it concluded an equity investment contract with Sigfox, a venture company that develops IoT-related equipment and technologies, in Paris on June 15. Samsung did not disclose the scale of the investment, however. Samsung acquired SmartThings, a software company in the U.S., for US$200 million. As a result, a division has been developed where Samsung Electronics manufactures electronic equipment, Smarthings produces software, and Sigfox develops communication networks.
Sigfox is famous for developing the “Internet of Small Things,” a subordinate sector of the IoT. The “Internet of Small Things” enables the fast exchange of small data with simple communication facilities without a high speed network such as LTE. The company also developed a technology that reduces the cost of base station construction and power consumption.
Last Feb., U.S.-based Intel, Telefonika of Spain, and South Korea’s SK Telecom invested US$115 million in total, which was the largest investment received among French venture companies.
Samsung Electronics has developed an IoT cluster which links South Korea, the U.S., and Europe with its new investment. For example, when the company produces smartphones, TVs, electronic sensors and chips, it can apply Sigfox’s communication technology. These products, then, operate in association with each other via the SmartThings software platform. Such vertical integration of terminal, communication technology, and platform is not common.
The market is expected to rapidly expand. According to Gartner and IDC, the number of devices connected to the communication network will be 25 billion, and is expected to become more than 50 billion in 2020. At the time, every device will communicate with every other device.
This year, Samsung Electronics plans to invest US$100 million to support IoT developers. It plans to connect TV in 2017, and all of its products including washing machines, air conditioners, and refrigerators, so that they can be managed and controlled.
Of the U.S., Google and Apple announced their operating system (OS) for IoT, Brillo and HomeKit respectively. Google’s Brillo enables smartphones, including low-end ones, to control household appliances. Apple’s Homekit can be installed in not only smartphones, but also the Apple Watch and other wearable equipment, so that the user can control connected equipment with the voice.
South Korea’s SK Telecom and Sweden’s Ericsson have concluded an agreement to cooperate in research and development of next generation IoT technology too.