Proving the Business Case for the Internet of Things

Samsung to buy SmartThings to challenge Google and Nest: report

Iain Morris
July 22, 2014
Samsung is reported to be in discussions about a takeover of home automation player SmartThings, whose technology allows customers to control home appliances such as lighting using mobile phones and tablets.

Home automation technologies have the potential to provide huge energy savings to customers, besides other benefits, and interest in the area has been growing fast since Google’s (Mountain View, CA, USA) $3.2 billion takeover of smart thermostat maker Nest (Palo Alto, CA, USA) earlier this year.

Apple (Cupertino, CA, USA) has already responded to Google’s move with the launch of its HomeKit service, allowing customers to control lights and other energy-intensive devices by means of their iPhones.

According to a reportfrom the TechCrunch website, Samsung (Seoul, South Korea) has already agreed to pay $200 million for SmartThings (Washington, DC, USA), although the deal has yet to be confirmed by either company.

SmartThings has raised some $15 million in funding from investors including Greylock, Highland Capital, First Round Capital and SV Angel, and has developed a system that lets mobile phones control smart devices such as lights and doorlocks.

A takeover would allow Samsung to better compete against the combination of Google and Nest, as well as Apple’s HomeKit, using a platform that is already mature and bringing its considerable marketing heft to the party.

However, TechCrunch also speculates that Apple, Google and Samsung are all motivated by a desire to obtain more data about consumers that can be used to develop additional products and services.

Samsung’s smartphone business has been suffering in the face of competition from Apple, and the company expects smartphone profits to fall by up to 26% this year.

Amid that slump, the organization is on the lookout for new opportunities that will help to restore its fortunes.
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