Samsung's next big thing may not be a gadget but its push in Silicon Valley.
The South Korean electronics giant has invested millions of dollars in the region over the past few years, building new businesses and hiring hundreds of employees. It hopes to do something here it can't do anywhere else.
In Silicon Valley, there isn't the stigma over failure and there's more of a willingness to experiment than back in Korea. The goal: Tapping into local talent and chance meetings with start-ups to innovate in areas where the company has struggled, such as software and services. Those aspects will become more vital as Samsung grapples with tougher competition in the mobile market and strives to create products that set it apart from rivals.
Overall, Samsung now has about 4,000 employees in Silicon Valley, an increase of approximately 30 percent during the past two years. That's a small percentage of the 286,000 total workers Samsung employs around the globe, but it's more than the worldwide headcount for hot startups AirBNB, Dropbox, Pinterest and Uber -- combined.
Here's a look at four businesses Samsung's counting on to help it do those things it can't do in Korea.
Media Solutions Center America (MSCA)
Major players: John Pleasants, executive vice president, who joined in June after stints at Disney and Electronics Arts; and Curtis Sasaki, senior vice president, who joined in 2011 after previously working at Research in Motion (now BlackBerry) and Sun Microsystems.
What: Media Solutions Center America works with developers to make apps specific to Samsung devices, and it's hosting this week's developer conference in San Francisco. It also aims to serve as a sort of agnostic business that works across all of Samsung's various operations, making products for Samsung's TVs, mobile devices and even refrigerators.
MSCA has created apps such as WatchOn, which allows users to search for content and control their TVs through their mobile devices, and the Milk Music streaming app. But the group also was responsible for building the slew of other Samsung apps that came preloaded on flagship devices such as the Galaxy S4 and were criticized as bloatware. While Samsung still makes some apps, it has moved away from installing so much software on its devices.
Instead, the overall company (and MSCA) has started to focus more on partnering with popular app makers such as Flipboard and Evernote. MSCA also plans towhich offers software tailored to the Korean company's devices. The store, hasn't been easy to use for developers or consumers.
Overall, MSCA has seen some big changes over the past year. Pleasants runs a unit that traditionally reported back to headquarters in Korea. In August, the group was shuffled under Samsung's US mobile business, and Pleasants reports to Samsung's North American CEO, Gregory Lee.
Pleasants, in a recent interview with CNET, wouldn't comment on how MSCA operated in the past, noting only that things have changed radically in the last three years. "We intend on upping our game," he said. "It's gotten significantly better and it will continue to get better."
Open Innovation Center (OIC)
Major players: David Eun, executive vice president, started OIC about two years ago. He previously worked at AOL and Google. Other top executives include fellow AOL and Google alum Marc Shedroff, who heads up partnerships and operations; former Walmart and eBay exec Jacopo Lenzi, who oversees acquisitions; and venture capital alum Brendon Kim, who heads up OIC's investments. Valerie Casey, a designer who's worked at IDEO and frog design, runs the Bay Area accelerator; Emily Becher, formerly of AOL and Yahoo, heads up the New York accelerator.
What: Open Innovation Center was started in early 2013 to focus on forming partnerships, making investments and acquiring startups working on software and services. OIC also operates two accelerators, one in Manhattan and one in Silicon Valley. The Bay Area accelerator, which was based in a former Palo Alto Borders two blocks from an Apple Store, is now looking for a new permanent home after giving up its space to SmartThings, which OIC acquired in August. The entrepreneurs are temporarily located in San Francisco.
OIC serves the role of the bridge between Silicon Valley and Samsung, helping startups and entrepreneurs navigate the massive conglomerate. It has made investments in more than 20 companies, and it led the acquisitions of New York-based cloud DVR maker Boxee and home-automation software provider SmartThings, which is relocating to Palo Alto from Washington, D.C.
the smartwatch, in mid-2013, OIC met with app makers in the US to talk about Gear and to try to persuade them to develop for the smartwatch. Many of the US apps came from OIC partnerships, and OIC is now doing the same to get developers to make education-focused apps for Samsung's Gear VR headset.
Overall, it's the group focused on working with software and services entrepreneurs in the Valley.
"We're trying to change ... [Samsung] to a more agile, nimble, consumer-focused company that focuses on software and services," said Valerie Casey, head of Samsung's Silicon Valley accelerator, which is a part of OIC.
Samsung Design America (SDA)
Major players: Dennis Miloseski joined Samsung Design America as head of design studio in September 2012 after working as head of design for special projects at Google. A key member of his team is Howard Nuk, who serves as head of industrial design at SDA and previously helped develop the Beats brand (now owned by Apple) while at design studio Ammunition.
What: Samsung Design America is a newly revamped branch of Samsung's design efforts that's tasked with turning "science fiction into science fact." The San Francisco-based group is not looking just at mobile but is also exploring new products related to the living room, digital appliances and other areas. Samsung's goal for SDA is straightforward: Help Samsung shed its reputation as a "fast follower" and establish itself as a trendsetter when it comes to ideas.
Thethe first product to come out of SDA, at Samsung in September 2012. Other SDA-designed devices include the curved smartwatch with a cellular modem, the and the wireless stereo headphones and communications device -- some of Samsung's flashier products introduced over the past year.
"When we opened the doors in late 2012, it was to create this ensemble of Valley-minded makers, people who weren't afraid to prototype early, break things, validate designs, really have a deep entrenched sense of users and research, and take that into the design process," Miloseski said.
Samsung Strategy and Innovation (SSIC)
Major players: Young Sohn, who runs SSIC, also serves as president and chief strategy officer of Samsung Electronics. Sohn, who's the highest ranking executive in the US besides North American CEO Gregory Lee, previously worked at Intel and various other Silicon Valley semiconductor and storage companies. Other top executives in SSIC include Ram Fish, vice president of digital health, and Luc Julia, vice president of innovation. Both spent some time at Apple as well as various startups.
What: The group -- which is a part of Samsung's components business, not the mobile or electronics divisions -- was formed about two years ago in Menlo Park, Calif., to create new technology, develop partnerships, and make investments into hardware, typically with a longer term view.
When forming SSIC, Samsung also introduced a announced a partnership with the University of California in San Francisco to create new sensors, algorithms and digital health technologies for preventative health.the Samsung Catalyst Fund, to boost its US footprint and spur innovation in areas related to the Internet of Things, materials and other similar sectors. Health care has been one of SSIC's first big focuses. In February, it
And in May, SSICto better measure certain health characteristics of wearables users, including heart rate and blood pressure. Its Simband fitness band reference design incorporates a new sensor module that can be used in future wearables, while a cloud-based software platform called Samsung Architecture for Multimodal Interactions, or SAMI, can collect sensor data from the devices for analysis.
"The mandate was really very simple," Sohn said. "Can we look at things we cannot do in Korea?"