Analyst events aren’t something we often cover, as they largely feature tedious talk about revenue and dry terms like “compound annual growth rate.” But they can also offer outsiders a peek at new products and technologies. Samsung hosted its 2013 Analyst Day yesterday in Seoul, and the company used the event to lay out a surprisingly cohesive message: more.
We’ve spent plenty of time covering Samsung’s mobile initiatives; the company dominates in smartphones of all shapes and sizes, it has a portfolio of tablets that rivals any competitor’s in scope, and it even has an impressive selection of notebooks. Dominance in the premium television segment has also been a priority, and Samsung now commands much of the smart TV and large TV market. Samsung has even become a leader in the premium home appliance market, providing high-end refrigerators, laundry machines, vacuum cleaners, and kitchen appliances to those with the means and the desire to buy an appliance with a Wi-Fi-enabled touchscreen.
A big part of its successes in these markets has had to do with vertical integration, a term that applies to companies that produce both a consumer product and the components that go into that product. Samsung can drive its own product advances by producing the displays, processors, memory, flash storage, software, and services that go into its lineup of devices, but it has also become a go-to component supplier for its consumer electronics competition; even when you don’t buy a Samsung product, you’re probably getting some Samsung components.
What is clear from its Analyst Day presentations is that Samsung plans to both expand the market segments it’s involved in and to drive innovation through a renewed investment in software, not just hardware.
Having moved over 100 million Galaxy S and Note devices during 2013, Samsung hopes the buyers of those products will look its way when choosing their next refrigerator or television. And in a page taken from Apple, Samsung is focusing on premium products, eschewing the low end. Samsung’s expectation is that, having established brand value in the minds of Galaxy handset buyers, the high prices on its other products will seem justified.
Samsung would also like a bigger presence in enterprise markets. In just a few years, Samsung SSDs have become coveted parts both in the consumer and the server space. The company’s mobile memory solutions have also been incredibly popular, and Samsung consistently leads in advancing new technologies and standards.
Samsung’s semiconductor arm, Samsung LSI, has also garnered industry praise for its ARM-based SoCs, which have seen steady growth in premium products and even bigger growth in low-power, low-end products. Yesterday, Samsung revealed its plans for a server-bound, 64-bit ARM SoC, which marks a big move into the data center. Power efficiency is a leading concern for data centers, and Samsung believes that its advances in memory technology and wider memory interfaces, packaged with a desktop-class, 64-bit SoC, will provide a value, performance, and power advantage over its competitors. Several of those competitors already have ARM-based server plans of their own, as with HP’s Project Moonshot. If history is any indicator, though, Samsung’s components will still find homes alongside server SoCs from Marvell and Qualcomm.
When it comes to the consumer experience, Samsung believes that the future is about software, and Kevin Tofel at GigaOm laid out part of Samsung’s strategy in a post highlighting the company’s first developer conference. Samsung President and CFO Sang-Hoo Lee focused on software during his remarks, and Oh-Hyun Kwon, Samsung vice chairman and CEO, said that half of the company’s research and development budget is steered toward software—and he expects that figure to grow. An annual R&D budget of $3 billion represents an enormous commitment to improving the company’s code. A big part of that process will be developing in-house media and software services, both for consumers and developers, possibly placing Samsung into competition with the likes of Amazon, providing data services while also giving users access to media.
Samsung already owns an enormous chunk of the smartphone market, but that isn’t a recipe for future growth unless you have other products to sell to all those existing buyers. Samsung’s approach will be to encroach further into our lives with more services—and more product segments—all sporting the Samsung logo.
via ArsTechnica