Samsung has acquired SmartThings for a reported $200M

3 Comments

Credit: SmartThings

Samsung has acquired SmartThings, a home hub platform that allows users to program their very own smart home. Over at Re/Code, Kara Swisher is reporting that Samsung will pay $200 million for the Washington, D.C., company.

Samsung said SmartThings will remain an independent company and current SmartThings CEO Alex Hawkinson, who is speaking in October at our Structure Connect event, will remain as CEO. The news is good for both companies, as I’ve written before, but might be a problem for consumers.

SmartThings will become part of the Samsung Open Innovation Center (OIC), which is responsible for bringing software and services innovation to Samsung Electronics, and will move its headquarters to Palo Alto, California.

The consumer conundrum

Given the hype around the smart home and the proliferation of platforms supported by big name brands — from Home Depot to Google’s Nest — the acquisition makes sense for both companies. As I wrote in an earlier story:

[blockquote person=”” attribution=””]With SmartThings, Samsung would get a platform that is trying to be as open as possible — even hacking together support for products without developer programs, such as Dropcam or the Nest before it created a developer program. The software side could use some work, but that is where SmartThings has been concentrating in its recent product upgrades. And for SmartThings, the money and clout that Samsung has will help it support more devices faster — a needed element for getting consumers to buy its hub and attracting more developers to the platform. It also means that the platform that SmartThings is building will survive what I expect will be a gradual evolution away from a dedicated hub that threatens those companies solely focused on building these universal remotes for the connected home.[/blockquote]

However, after I wrote that story commenters pointed out that Samsung doesn’t have a great history of buying innovative hardware and supporting it. They pointed to the acquisition of Boxee, an online TV platform that basically allowed you to get the internet and apps on your TV. I had one, but hated the experience so much I had sold mine by the time Samsung had bought it. Much like SmartThings, I found the experience too work-intensive as a user, although the openness of the product appealed to me.

Samsung, however, shut Boxee down. And while I was unwilling to learn the intricacies of Boxee’s box, I have invested a lot of time and money into building an automated home around SmartThings. So if Samsung shuts down the apps and software associated with the hub I would be one unhappy camper. However, it’s not clear that there are all that many SmartThings customers out there.

Back in November, a SmartThings founder put the number at 10,000, and a few months later CEO Alex Hawkinson only said it had been seeing 10 to 20 percent growth per month. However, depending on what comes next for SmartThings, this sale could muddy the waters for consumers who are waiting to dive into a smart home buy.

I certainly would wait to buy any product from a startup until I see how this cycle of acquisitions plays out, and if I were looking at SmartThings, I’d wait to see what Samsung plans to do with it. This isn’t a new story for the early adopters in any area, but it is a reminder that we’re still a long way from home automation’s iPhone moment.

3 Comments

Jason

Or you can invest your money in a company that has not relied on external investors to develop their technology and thus is not looking to be acquired by Samsung, Google or other big players.

I would look for a company that has their own vision and is profitable and then buy my Smart Home gear from them.

tom

>>we’re still a long way from home automation’s iPhone moment.

True that. SmartThings kickstarter backer here. Extremely disappointed with SmartThings. Lots of hype, but nothing to show for it. Support for developers is lazy, and the ST API is poor and complicated. SmartThings is just a bunch of unorganized hackers trying to get other hacker/devs together (and when the hacker/devs get frustrated, we just buy Arduinos and Raspberry Pis and build our own thing -> my experience). So major fail, but a great cash out, I guess. Don’t buy stock in Samsung with this purchase.

Samsung would have been better to buy IFTTT, and at a much cheaper price than 200M. A pure software play, and all the IOT companies (including SmartThings, Nest, WeMo, etc) are dying to become an integrated channel with IFTTT anyway. Own IFTTT, and you’ll own the “IOT + social + everyone else” API integration platform.

As soon as IFTTT becomes, an ‘If this AND this, then that” or “If this OR this, then that”, or ” If NOT this, then that”, etc., then IFTTT will become the glue of the programmable Internet.

rupa

I was just about to purchase a bunch of smart things gear to replace my adding alarm system and add home automation. I agree with t the advice and will wait a bit longer to see how things settle out.

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