I. Samsung IoT Business Strategy
Recently, several S. Korea’s news media expressed their concerns
regarding the future of Samsung IoT business. The concerns are based on KT
(Korea Telecom)’s recent research report “Smart Home Trends &
Implications.” The report doubted Samsung’s capability to drive successful
Smart Home business, which is the key IoT (Internet of Things) business of
Samsung. The report reasoned that, because Samsung has never been successful in
the platform business, Samsung may lack in execution capability to become the
winner in the IoT platform wars, and thus, in the emerging IoT market. Rather,
the report expected that Apple and Google will lead the future Smart Home
market because of their core confidence in platform based SW/IT integration.
In response to the concerns, Asiatoday, a S. Korean newspaper,
expressed a different view about the Samsung’s future of IoT business. Quoting personal discussion with Samsung executives,
Asiatoday said that Samsung has never derived the IoT as a main business up to
now because the lack of business reality of the IoT market. Rather, Samsung is
at the stage of preparing IoT business by focusing on R&D and business
ecosystem development. Asiatoday also mentioned that the “Fast Follower
Strategy” that Samsung has several success track records will also work in the
emerging IoT/Smart Home market because of its HW integration capability across
chips, devices, networks and appliances, which are the key business resources
for offering new values to customers.
Actually, Samsung has just started to derive the IoT business by
providing the open IoT platforms and intensifying relationship with the IoT business
ecosystem collaborators. Samsung released the IoT platform “Artic,” an open
platform comprised of hardware modules, software, networking and cloud
services, in May. Samsung also recently
introduced a Web based platform, IoT.js, to provide interoperable service
platform. SmartThings, acquired by Samsung last year, announced the SmartThings
Open Cloud, a cloud service. Samsung is fostering its collaboration
relationship with innovative IoT start-ups through the Samsung Strategy and
Innovation Center in Silicon Valley.
In addition to the efforts to have a leadership in the IoT
business ecosystem, Samsung also need to make efforts to form the IoT customer
ecosystem. The “First Mover” advantage and the business ecosystem integration
capabilities are not the only key success factors that made Apple as the winner
in the smartphone market. Keep innovating to offer values to customers and always
satisfy customers’ expectations, and thus, to form the Apple fan club and enthusiasts,
is the most important success factor. Therefore, to become the winner in the
emerging IoT market, Samsung also need to do its best to offer new values to
customers and form the Samsung customer communities for customers’ satisfaction
and meeting the expectations by orchestrating its IoT business architecture.
Following figure illustrates Samsung’s IoT business architecture to orchestrate.
II. Patent Exploitation for Samsung IoT
Business Strategy
Samsung is the 2nd largest patent holder in
the US (4,952 issued patents in 2014) and the 1st largest patent holder in
Europe (2,541 issued patents in 2014). Thus, patents can be a very important
business resource to exploit for developing the Samsung IoT business
leadership. For example, Samsung patents can be exploited for the development
of the disruptive IoT products/services by opening patents to the business
ecosystem collaborators in diverse industries (the “Open IP Innovation”). By
letting the collaborators develop the disruptive IoT products/services
exploiting Samsung patents, Samsung can keep focusing on the current mainstream
market in addition to effectively prepare the emerging IoT market created by
the disruptive IoT innovation.
Recently, Samsung opened its 38,000 patents
in various fields including telecommunication, semiconductor and display to S.
Korean SMEs and venture companies as the part of the creative economy
innovation center project. Total of 3,000 patents will be provided for free.
Samsung will send its patent experts to the center to help exploiting its
patents by the selected members of the center. Samsung will need to extend the
Open IP Innovation program to its global IoT ecosystem collaborators for
developing the disruptive IoT products/services.
A smart and practical method to exploit
patents for the development of the disruptive IoT products/services through the
Open IP Innovation is to apply the new product/service development methodology
in the “Blue Ocean Strategy” (the “Blue Ocean Patent Strategy”). The basic
principle in the Blue Ocean Patent Strategy is to exploit patents to achieve
the value innovation by using the patented technologies to create new values,
and thus, to provide new products/services. The exploitation of existing
patented technologies not only allows the low cost IoT product/service
development but also provides the protection against competitors’ infringement.
For details regarding the IoT business
ecosystem, business models, platforms, disruptive innovation and related patent
strategy, please consult the following articles.
IoT Ecosystem & Patent Strategy: https://www.linkedin.com/pulse/iot-ecosystem-patent-strategy-alex-g-lee-ph-d-j-d-clp?trk=pulse_spock-articles
IoT Disruptive Innovation & Patent
Exploitation: https://www.linkedin.com/pulse/iot-disruptive-innovation-patent-exploitation-lee-ph-d-j-d-clp?trk=pulse_spock-articles
IoT Business Models & Patent Eligibility: https://www.linkedin.com/pulse/iot-business-models-patent-eligibility-alex-g-lee-ph-d-j-d-clp?trk=pulse_spock-articles
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