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Samsung co-CEO talks TVs and appliances with CNET (Q&A)

CNET sits down in Korea with Boo-keun Yoon, Samsung's consumer electronics chief, to talk about what it's doing with smart TVs and washing machines -- and why the hesitancy toward new display tech.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
7 min read
Boo-Keun Yoon, co-CEO of Samsung and head of the company's electronics business, talks up Samsung's TV strategy at CES 2013. James Martin/CNET

Editors' note: Be sure to catch the other stories in this package: on Samsung's bid to rule the world, on the many pieces of the Samsung Group, on road-testing Samsung'sS Translate app, and on how Samsung torture-tests its products.

SEOUL, South Korea -- Samsung gets plenty of press for its phones, but TV is how it made its mark as a high-end consumer brand.

The company often points to its Bordeaux line of LCD TVs (the ones with curved bottom edges reminiscent of a wine glass) from 2006 as an example of its design chops. Since then, it has held the No. 1 spot in the TV market. In fact, Samsung sells more televisions in the United States than LG, Sharp, Panasonic, Sony, and Toshiba combined, according to NPD Group. And its US market share is nearly double that of No. 2-ranked Vizio.

Much of the credit goes to Boo-Keun Yoon, co-CEO of Samsung Electronics. He not only oversees TVs but also supervises home appliances, medical devices, and essentially everything else that's not mobile or components. Yoon made a big bet on LEDs early on that has cemented Samsung's lead in TVs. Now, he's now betting that smart TVs and new display technology, such as 4K ultra-high definition and OLED, will revive a stagnating television market.

CNET traveled to Korea and had a chance to chat with Yoon -- via interpreter -- in Samsung's Suwon headquarters, known as Digital City. Here are some edited excerpts from that discussion:

Smart TVs have been a big focus for Samsung, and you recently bought Boxee. What are your plans for that company?

Yoon: The smart TV that we put out, it's named TV, but TV is only a part of its features. It has many things in there that it can do. ... Right now the TV market is stagnating, it's not growing. We want to offer new experiences for the consumers whether it's in terms of songs, content, and games, so we can contribute to the process of reinventing the TV market. The reason why we bought Boxee is that it's part of that strategy that we have for the smart TV. We needed something they're contributing in the process.

What is that? Cloud DVR? Cloud gaming?
Yoon: What you just mentioned is being discussed on the industry level right now, but it's not really news. Of course in order to realize what you just mentioned, we are thinking all of the industry players should coordinate and cooperate with each other. So Samsung, cable providers, content providers, and operators as well will need to cooperate so we can create an ecosystem in which it would be easy and convenient for the consumers to use the services as well as enjoy the good quality of the screen.

Is it difficult working with these companies that all have different goals? Are talks progressing?
Yoon: Discussions are progressing well since we have acquired Boxee.

What about content? Sony, among others, are working on over-the-top TV service, and deals with content creators. Is this something Samsung would ever try?
Yoon: We do need to talk with all of the players involved in the industry, such as broadcasters and operators, whether on the satellite side or the cable side, in order to set up the ecosystem in the smart TV.

But Samsung doesn't see itself competing with a cable provider, offering Internet-based TV service where you control the whole process?
Our intention is to create a well-functioning ecosystem, and that requires cooperation and coordination, not strong competition between players. ... We want to play the role of the delivery [vehicle].

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With the smart TV products that companies are working on, even reportedly Apple, what pressure do you feel to set up an ecosystem? What would your ecosystem look like?
Yoon: One of the efforts we can do to set up an ecosystem would be to develop a gateway. ... Right now if you are connecting, for example, a cable line to the home, the cable would be connected to the home in a specific location in the home and from that location there would be a set-top box and cables would be connected to link that cable line from the outside to devices in the home. Every room has a set-top box and TV.

Right now what we're trying to do is set up a gateway in which the cables will come all the way to the home area and from then on there would be a gateway setup. From there, there would be the signals of the cable sent to the different devices wirelessly from the gateway. So there would be no need for setting up the cables, so that means [one central box and] less cost for installation. This would be one of our roles that we could play here.

Going forward, will more innovation in consumer electronics come from hardware or software?
Yoon: Innovation will come from both sides, hardware and software, but the ratio or share itself will be different for different types of products. I do feel that for the home appliances side, there will be more innovation coming from the hardware side. [As for TVs], more software.

Could we see a TV with a flexible display?
Yoon: It can be.

Samsung has seemed a little hesitant toward the new types of TV displays, such as 4K, or ultra-high definition. Why is that?
Yoon: First, in regards to UHD or UDTV, currently the content for broadcasting content hardly exists. But we [had] been developing that technology internally but we [hadn't] really launched it in the market because we felt it wasn't ready. But we now have the largest size of TV on the UHD side, and we have smaller products as well. The reason we weren't actually first in the market is not that we weren't technology-wise capable but that we thought that the market wouldn't be as big in the near term.

As for OLED, we have been preparing that technology for a long time. We recently launched that TV. ... The reason why we weren't really fast-moving on the OLED side was that we didn't really want to introduce a product which was not really perfect. We already were No. 1 -- we are No. 1 in the market -- so in order to launch something in the market, we wanted something that's perfect. That's why we took really great care in preparing this product.

So which do you see as being more of a mainstream product first, OLED or 4K-UHD? And why?
Yoon: UHD. OLED requires further development in terms of size and resolution, and also the price of OLED products should come down so it can be more affordable for consumers for acceptance.

What takes up most of your time and focus right now?
Yoon: The biggest portion of my time is [spent] on home appliances. I want to provide innovation to the home appliance side because we want to be No. 1 on the home appliance side by 2015. So by that time, we want to make products that are very enjoyable and convenient for customers to use.

Boo-Keun Yoon, Samsung co-CEO and head of the company's electronics business, talks at the opening of Samsung's New York accelerator in September. Shara Tibken/CNET
Samsung has been making smarter appliances, such as washing machines that connect to smartphones. Why?
Yoon: The reason why businesses want to ... introduce the concept of smart appliances is because we want to transform the concept we have about housework from a nuisance or a chore into something you enjoy, so that it can become easy for you to use as well as convenient.

In order for the consumers to fully accept the new smart devices or smart appliances, they would have to enjoy using it, and it has to be very convenient to use. But for the time being, it only satisfies a portion of those needs. So we should do more work in terms of developing the next-generation technology, having consumers use it more and then communicate the experience, as well as making the product affordable for consumers. These are some of the challenges or bottlenecks that we need to overcome to fully introduce smart appliances.

If you were to link a smartphone with a washing machine, for example, in order for the user to turn on or use the washing machine, the user has to have the smartphone with him or her, so that would be an extra step or an extra burden for the time being. So we have to try to think of more ideas so that it would be very easy and simple and enjoyable for the user to use the smart devices with their appliances.

As you look to the future of Samsung, the TV market has stagnated. Mobile appears to be slowing. What's the big area for Samsung that could spur a lot of growth?
Yoon: Just to give you a general outlook on the total business -- of course the TV market is stagnated right now, but we do feel that it will continue to grow into the future. There will be new different types of displays ... introduced into the market. There's also smart TV.

As for mobile, it can continue to grow with other accessories, such as wearables, as well as the introduction of new content. That could be a new source of growth. As for the other areas, such as medical devices, printers, and home appliances, if you can get the market ... up to the critical mass side, that business itself can stabilize and be a mass source of continuous business for the company. So we're preparing for those areas, as well.

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