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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)

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