Samsung, SmartThings and the open door to the smart home (Q&A)

SmartThings CEO Alex Hawkinson explains what the smart home means to parent Samsung and how Apple's HomeKit fits in.

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Alex Hawkinson -- CEO of SmartThings, which Samsung acquired last year-- talks with Samsung Electronics CEO BK Yoon about the company's plans to be open. James Martin/CNET

LAS VEGAS -- Samsung is making a huge bet on connecting all of its devices in the Internet of Things, and it's counting on SmartThings, a startup it acquired last year, to help it do that.

During the 2015 Consumer Electronics Show last week in Las Vegas, the company, led by co-CEO Boo-Keun Yoon, vowed that all of Samsung's products would be built on platforms that are open and compatible with other products. And Yoon said that that 90 percent of its products -- which range from smartphones to refrigerators -- would be able to connect to the Web by 2017. In five years, every product in the company's entire catalog is expected to be Internet-connected.

In effect, Samsung is readying for the Internet of Things (IoT), the term for the concept of using sensors and other technologies to hook just about anything you can think of into the Internet. Analyst firm Gartner predicts the number of networked devices will surge to 26 billion units by 2020 from about 900 million in 2009, turning formerly "dumb" objects into smart ones that can communicate with each other. IDC reckons the IoT market will hit $3.04 trillion that same year.

Samsung acquired smart-home startup SmartThings in August to help with its push. SmartThings' technology helps consumers to control their appliances with their smartphones, smartwatches and other devices, and SmartThings has been viewed as key to Samsung's smart-home and Internet of Things efforts.

SmartThings last week unveiled the second generation of its smart home automation hub that connects with sensors in a home to detect characteristics such as temperature and moisture. It also introduced a new home-monitoring subscription service that will send immediate texts or calls to the smartphone of a user or designated contacts about problems or emergencies at their home -- such as a flood, fire, plumbing leak or a pet out in the yard when a storm is starting. The premium service also includes built-in DVR services for cameras.

Alex Hawkinson, CEO of SmartThings, talked with CNET at CES about SmartThings' new offerings, what open means to Samsung and even how it will work with Apple's HomeKit. Here are some edited excerpts from the discussion:

CNET: What will your new premium service cost and how does it work?
Hawkinson: We haven't announced it, but it's going to be inexpensive. If you think of a security system, [our service is going to be] way less expensive. ... Basically the idea is aligned with the security peace of mind, and it comes back to the Smart Hub too. You really care when there's a problem in your house. Rather than just send a push notification to you or your spouse or partner, the basic idea with SmartThings Premium, it can create an ID of an incident occurring in your house. It can literally put a neighborhood watch around your home for different issues.

So for moisture on the floor, it's my next-door neighbors. If [SmartThings] can't reach you with a push notification and you don't say, "It's OK, I'm checking it out," it will try to call you. If it can't reach you, it will call and text those people in an orderly fashion. It's almost like a group chat. They can see and get temporary access to your house. They can see the events and they can say "I'm checking it out, don't worry about it."

It's not just for security because it can be [used with] the elder care apps in the platform. Grandma didn't get up this morning. Somebody check on her. My kid didn't get home from school on time. I left the garage door open. Whatever it is. My dog's out in the yard and there's a storm coming.


Samsung Electronics co-CEO B.K. Yoon said during his keynote at CES Samsung currently makes 665 million devices a year, including TVs and home appliances. Will these all come with SmartThings built in?

Hawkinson: Over time, all the appliances already will come with SmartThings integration. ... At some point, this is going to reach the stage where everybody, even the laggards, will just not buy something that's disconnected. Everything will have that capability somewhere inherently in it. At some point there also will be market for premium models that have the cellular capability built into them. Even the baseline hub will go away sometime soon.

[Yoon] alluded to it that when you buy a device like a TV or a fridge, it will just have it there.

When will new Samsung TVs come preloaded with SmartThings? And what about mobile devices?
Hawkinson: It will take some time. There's so much infrastructure. Samsung sells two TVs a second right now. All the 2015's are even locked and loaded into retail channels right now. It just takes time, but I would say in the time frame of our launch and during 2015, there will be apps on TVs natively. There will be native mobile integration experiences, things like that.

At the time of launch, you'll be able to add that on even if it's not burned into the firmware yet. By a year from now, one thing that nobody should doubt is we're going to be one of the platforms going at it really, really hard, everywhere.

When do TVs start to replace the separate hubs?
Hawkinson: I don't know, but pretty soon. The whole technology industry moves so fast now. ... [It will happen] very quickly, relatively speaking, but you can have multiple hubs in a single house. If you've got the TV as a hub, that could be awesome and go alongside [the standalone hub]. ...

Hawkinson and Yoon talk up the company's partners. James Martin/CNET

Until we get to totally embedded hubs, I'd say we're still more than a year out just because it takes time to get these big products to have all this stuff fully integrated. But we'd like it to happen as fast as possible because it's good for the consumer.

Samsung made a pledge to make its devices and software open when it comes to the smart home. What does that mean?
Hawkinson: The litmus test is go to anybody else who says they're open. If they make an X, can you use another X from a competitor in their own app? And if you make an app and you produce a device, can your device be used in another platform without that person having to use your app?

I think we're the most open now. The principle is anything we can do in our core consumer experiences should be available to anybody. ... Anything we can do, you can do as well.

Our issue has been the lack of openness on the other platforms, even where users demand it. We get hammered on it, but it turns out to be in the API terms and conditions of Company X. You can't keep data more than X days and you can't build these kinds of apps and so on. It's just sort of against our principles.

Samsung has made this openness pledge, but what about everyone else? Apple has plans to do its own thing with HomeKit.
Hawkinson: We're the only platform with a Windows Phone app right now. Why? There's a small but passionate community of Windows Phone users who want it. As an example, we believe our [version No. 2] Hub is HomeKit-capable, but HomeKit's not mature enough yet. We have a huge iOS base. We'll continue to go for native experiences for them as much as we can and the goal is whatever's right for the consumer -- truly.


It's great that Samsung is making this commitment to open standards, but its wearables don't work with non-Samsung devices. Is that some conflict with the openness pledge?
Hawkinson: I don't think so. That's always the challenge. [With Apple's AirPlay,] from your iPhone you can project onto your laptop. It's fantastic. I know a lot of conference rooms have an Apple TV because it's easier than a projector. But [Apple] had to make all the pieces work together. You can't be penalized if you're, like, we have to bend the laws of physics to get the TV to take content from this and do all this extra stuff.

It doesn't mean they should hold back innovation because they can't get everyone to do it all at the same time. It's always a balancing act. The principle is to be open. I think everybody will see that [from Samsung] more than anybody else.

If you just want a smart thermostat, it's about $300, but if you really want to make your home much smarter, it really adds up. When does making a smart home become more affordable?
Hawkinson: A four-bedroom house would be a couple thousand dollars. [With] the consolidation of standards, things will get cheaper. But that's not very expensive relative to the value. A security system will cost way more than that very quickly. The energy savings [by using SmartThings] can be 20 to 30 percent per month in a household. That adds up very quickly. And so, a couple thousand dollars is the cost of a new couch. It's not that much relatively speaking.

I do think [with] things like the premium service -- will your insurance bill come down over time? Will that add more to the savings? Will your energy bill come down over time and add more to the savings? Will your telecom carrier give you the cellular-connected hub and discount the hardware in order to make that possible to get the recurring revenue? I don't know. But I know that the economic benefit paradigm has already crossed over. When somebody's up and running, they feel much more value than the cost already.

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