Samsung-LG Alliance
The competition between IT companies at home and abroad for Internet of Things (IoT) standards to dominate the global market is swinging into high gear. In this environment, Samsung and LG Electronics have agreed to unify IoT standards. The deal is expected to become a bridgehead for local companies to set IoT standards.
According to industry sources and the Korea Association of Smart Homes (KASH) on Nov. 13, Samsung and LG have previously competed with each other to dominate the local IoT market using different standards. However, the two tech giants reached an agreement that they will unify IoT standards to commercialize them in the local market so that they can hold a dominant position in the global market. As a result, the KASH is planning to use new standards for wired smart homes, and to unveil new products by June 2015.
The smart home represents the global IoT market worth 200 trillion won (US$182 billion), comprising 25 percent of the market.
Due to the agreement, after the latter half of next year it will be possible to develop and produce door locks, boilers, lamps, system air conditioners, gas valves, and automated meter reading systems in accordance with standards for wired smart homes. In addition, it will become easier to maintain and improve services.
Samsung, LG, SK Telecom, and KT will lead the efforts to unify all requirements for wired smart homes. They plan to develop standards for wired smart homes by August of next year and to use them as late as May 2016.
Global IoT standards are decided by the number of users, and thus it is necessary for local companies to enter a consortium with a large number of participants. Alternatively, they should continue their work to develop a chosen standard in the consortium.
The two prime consortia for global IoT standards are the Allseen Alliance, which was established in December of last year, and the Open Interconnect Consortium (OIC), which was created in April 2014. LG, Qualcomm, Cisco, Microsoft, HTC, and AT&T are members of the Allseen Alliance, while the OIC is led by Samsung, Intel, and Dell, with Atmel, Broadcom Corporation, and Wind River as members.
It is too early to tell which consortium is technically superior or has more participants. Market dynamics can change by the extent of cooperation between participants in each consortium.
Therefore, experts are saying that if the IoT standard agreement between Samsung and LG jump-starts IoT services in the nation faster than any other country, local companies can be in an advantageous position in the global market for IoT standards, where there is no dominant player.