At Samsung Developer Conference (SDC), held November 7-8 in San Francisco, a series of announcements were made. These included new developer tools for both AI assistant Bixby and smart home platform SmartThings, a new smart user interface called OneUI to be rolled out in January 2019, and a quick glance at Samsung's highly anticipated foldable smartphone that uses Infinity Flex Display technology.
On the back of disappointing smartphone sales performance in 2Q18, which was announced the previous week, SDC's keynote needed to regenerate confidence in Samsung's consumer devices business and future technology leadership. AI, IoT, and 5G are fundamental growth opportunities that Samsung addressed during the keynote. Overall, the company is heading in the right direction but needs to progress much faster – most of the announcements made at the show won't impact its performance for at least another year.
AI has become a key differentiator in the consumer electronics industry, and Samsung is playing catch-up as AI assistant Bixby is trailing far behind the competition. A recent survey conducted by Ovum in 2Q18 shows that Bixby is used by only 6% of Americans, far behind Amazon Alexa (26%), Apple Siri (24%), and Google Assistant (22%). The most interesting and impactful announcement was the release of Bixby Developer Studio, which uses AI to help write code via dynamic program code generation, allowing developers to easily and quickly create features and services for Bixby. Called Bixby Capsules, they will be made available to consumers via an upcoming storefront called Bixby Marketplace. Alexa Voice SDK and Google Actions SDK were released in 2015 and 2016, respectively, and Alexa now has more than 50,000 skills available. To plug that gap, Samsung will need a lot of money and scale. To that end, Samsung announced it will invest $22bn in AI and make all its devices – at 500m device sales per year – AI-capable by 2020. Most of that volume will come from Galaxy smartphones with Android and Google Assistant. This raises the question why developers would develop twice for the same device? Bringing AI services beyond smartphones to devices such as Samsung TVs and appliances is where Bixby could make a difference, but Alexa and Google Assistant are also present and very competitive in those categories, so it won't be easy.
IoT was the main focus of last year's SDC. This year Samsung provided a performance update, some tools extension, and a developer interface revamp. The SmartThings device ecosystem doubled in size throughout 2018 with new devices from Wi-Fi mesh routers to smart home security devices and in-car systems. The SmartThings device installed base is still relatively small (in the tens of millions of devices), considering Samsung's overall scale. A key factor in SmartThings' future growth will be its ability to grow outside of the US. Partnerships such as V-Home with Vodafone in the UK are a good start.
Finally, Samsung reminded the world of its leadership for display technology. It introduced the new impressive Flex Display Technology and offered a glimpse of its upcoming foldable smartphone. The device featured two screens: a foldable one inside the handset and a standard touch display on its front, offering two display modes. If successful, this would transform the way apps will be displayed and used and will require developers to adapt their code to the new format, based on the OneUI user interface. Google took the stage to show support for Samsung's new form factor. Some of the software tools developed for it will feature in the next Android release, paving the way for other device makers to follow suit.
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Ronan de Renesse, Practice Leader, Consumer Technology and Media & Entertainment