By Timothy W. Martin
SUWON, South Korea-- Kim Hyun-suk, who leads Samsung Electronics
Co.'s push into artificial intelligence, is perplexed by the
voice-activated speaker craze.
"Deep down, I wonder why everyone is talking about speakers,"
said Mr. Kim, the new CEO of Samsung's consumer-electronics unit,
in a rare interview. The South Korean company sells half a billion
devices and appliances every year.
"Isn't it the same as already having 500 million speakers out
there?" Mr. Kim said.
Samsung, the world's largest maker of smartphones, TVs and
semiconductors, is about to find out if that is true. Alphabet
Inc.'s Google and Amazon.com Inc. have popularized the tabletop
speaker, creating a mainstream gadget that people are comfortable
speaking to. This has given the two American companies an early
advantage in bringing AI into the home.
But Samsung--whose own voice-activated speaker has yet to
debut--has a broader vision: It promises to put AI features and
internet connectivity onto all its products by 2020.
The goal is to transform Samsung's stand-alone home appliances
into an army of easier-to-use synced devices capable of fielding
verbal commands. The bet, if successful, would increase consumer
demand for Samsung's lineup of phones, appliances and televisions,
as it fends off the growing ambitions of Silicon Valley rivals and
lower-cost Chinese manufacturers.
The number of homes world-wide using at least one
wireless-connected "smart home" device is expected to reach 280
million by the end of 2022, growing more than fivefold from 52
million last year, according to ABI Research Inc., a
market-forecasting firm.
Samsung would like consumers to use its homegrown virtual
assistant, Bixby--akin to Amazon's Alexa or Apple Inc.'s
Siri--though it is open to partnering with offerings from other
companies, 57-year-old Mr. Kim said. The firm's previous AI efforts
didn't gain much traction because they tended to focus on
individual products, rather than viewing Samsung gadgets all
together.
And Bixby had a delayed release of its own last year, struggling
initially to comprehend English-language syntax and grammar, The
Wall Street Journal previously reported.
Samsung is opening new AI research centers in Cambridge, U.K.,
Toronto and Moscow this month. The company plans to build an
internal team of at least 1,000 AI-dedicated engineers and
researchers by 2020, with new hires and worker reassignments. Its
Bixby-powered speaker is expected to launch in the second half of
this year, Mr. Kim said.
The AI push could give Samsung troves of new consumer data,
which is relatively uncharted territory for the company despite its
ubiquitous product lineup. Other tech giants have built massive AI
databases over the years that allow for smarter, more intuitive
software because gaining a critical mass of information is
essential.
The U.S.-China tech war could indirectly strengthen Samsung's AI
push. The South Korean firm, unlike Chinese rivals, has a major
foothold in the American market for consumer electronics. It also
has access to the China market, and offers a wide-range of
products, unlike many U.S. tech companies.
Unifying all of Samsung's products won't be easy. Skeptics say
the company is years behind when it comes to AI. The firm's
strength in making products--with clear goals and rigid
deadlines--runs counter to the unpredictable slog of software
development, they say.
"Samsung's strength is speed and execution," said Chang Sea-jin,
a professor of business at the National University of Singapore who
has written a book on Samsung. "But with software, speed doesn't
matter. What matters is whether that software is something a
consumer wants."
The AI strategy is so central to the Samsung's future that last
year it formed an AI Council, a group of more than 20 top
executives who meet every other month, according to company
executives. Widely attended gatherings are rare at Samsung, which
is split into three units focused on mobile devices, consumer
electronics and components. Each unit has its own CEO.
Mr. Kim, who worked in Samsung's TV research-and-development
department, says the company's AI strategy has to remain grounded
in manufacturing and dismissed assertions that the company's push
is late. Internet companies with deeper AI campaigns harness big
data to improve web searches or online retail experiences, but
Samsung isn't targeting those businesses, he said.
"We are a device company," Mr. Kim said. "The rules of the game
are different. It's not right to see it as a matter of being early
or late."
AI, which drifts into nearly every industry, is still in its
early stages, meaning there is still room for the Samsung strategy
to work and not compete deeply with Facebook Inc. or Google, said
Luca De Ambroggi, a senior AI researcher at IHS Markit, a market
researcher.
In the future, Samsung's appliances and gadgets will be
centralized with its "SmartThings" app, a 2014 acquisition that was
originally a way to group internet-connected devices.
The difference now is the inclusion of Bixby, which made its
debut last year on Samsung's flagship Galaxy S8 smartphone. The
company plans a "Bixby 2.0" later this year with the launch of its
Galaxy Note 9, the company's other premium handset, Samsung
executives say.
The upgraded Bixby, in a nod to the broader device push, will be
able to respond to the voices of up to 10 people, up from one now.
It will feature more third-party collaborations, including 500
partnerships in the U.S., which Mr. Kim hopes could one day grow
into the "tens of thousands" globally. But consumers will be
looking for timesaving, practical uses of Bixby, industry analysts
say, rather than just improved capabilities.
"Samsung hasn't really caught up with the competition with AI,"
said Ronan De Renesse, practice leader for consumer technology at
Ovum, a market researcher. "But do they really need to?"
Write to Timothy W. Martin at timothy.martin@wsj.com
(END) Dow Jones Newswires
May 23, 2018 08:01 ET (12:01 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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