Samsung's Smartphone Business Is Slipping, But We're About To Learn Its Plan To Fix That


samsung holiday commercialSamsung

What's likely going to be a difficult year for Samsung officially begins Monday at the Consumer Electronics Show in Las Vegas.


There, one of Samsung's three CEOs, BK Yoon, will give the opening keynote for the conference.

However, the keynote won't focus on the biggest profit driver at Samsung, its mobile phone and tablet business. That segment is faltering and mostly to blame for Samsung's 60% drop in profits from a year ago.

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In the near term, Samsung is going to keep chugging along making its pricey smartphones and tablets while smaller, scrappier companies like Xiaomi eat into Samsung's sales by making phones that are just as good but cost about half as much.

But Samsung's long-term plan is about more than just phones. At the keynote on Monday, we're going to get a deeper look into its bet for the next big thing after that, the so-called "internet of things" (IoT) trend, which means controlling stuff like lights and door locks in your home through the internet.


Last year, Samsung bought a startup called SmartThings, which makes an IoT platform hardware makers can build into, for about $200 million. And I've heard SmartThings' CEO Alex Hawkinson is going to have a big part in Monday's presentation.

I tested SmartThings in my apartment almost a year ago, and while it worked well and as advertised, it still didn't improve my life enough to justify spending the cash to turn all the normal appliances in my home into "smart" appliances. I could do neat stuff like have my lights switch off automatically when I left my apartment or get a text message if there was a leak in my sink, but none of that made me think smart homes are going to be the next big thing.

Still, Samsung has already started teasing the smart home concept, like in this holiday commercial starring Dax Shepard and Kristen Bell:

Pretty cool, right? The phone is still the most important gadget, but only a small part of a much bigger "smart" system. The phone connects you to more than just Facebook and Snapchat, it connects you to a bunch of stuff in the physical world too.

That said, I'm still skeptical of the smart home concept based on what I've seen so far.


When I first used an iPhone, I could tell it was a game changer. Same with Facebook's prototype virtual reality headset, the Oculus Rift. But the concept of a smart home today is still too mushy and geeky for me to see a lot people adopting it any time soon.

This is a big moment for Samsung. It needs to prove that even though it's wavering in mobile, it still has a plan to tackle the next big thing. More importantly, this is a chance for Samsung to show us its vision for IoT is clearer and more useful than what we've seen from Google, Apple, and others that are only beginning to explore the space.

Otherwise, it's going to be difficult to remain optimistic about the company.