Samsung’s Strategic Shift: Embracing AI and Smart Home Technologies for Future Growth
As Samsung navigates the complexities of a rapidly evolving tech landscape, the company is setting its sights on artificial intelligence (AI) and smart home technologies to spearhead its growth in 2025. This strategic pivot comes in the wake of mixed financial results for the fourth quarter and the full year of 2024, as reported by Samsung officials. Despite achieving record sales of $76.4 billion in semiconductor revenue, the company faces significant challenges, particularly in the competitive AI chip market.
Samsung’s mobile division experienced a 25% decline in operating profits, while its TV business saw an even more dramatic 60% drop. In response, Samsung is betting heavily on AI and smart home technologies to regain its footing and drive future growth.
Doubling Down on AI Home Devices
Samsung is intensifying its focus on AI-powered home devices, with a particular emphasis on high-bandwidth memory chips designed to optimize AI processes. These innovations are expected to play a crucial role in the company’s upcoming product launches in 2025.
During a recent earnings call, Chief Financial Officer Sooncheol Park expressed the company’s commitment to overcoming current challenges. “The management team, including myself and all the employees at Samsung Electronics, are very aware of the challenges the company is facing and we are fully committed to overcoming the current difficulties,” Park stated. He emphasized the diversity of Samsung’s business portfolio, which spans various industries and market dynamics, as a key factor in driving gradual recovery.
Integrating AI Into SmartThings Platform
As part of its strategic vision, Samsung is integrating AI across its ecosystem, including the SmartThings platform, to create a seamless and hyper-personalized home experience. At CES 2025, Samsung unveiled its “Home AI” vision, which aims to enhance the interactivity and intelligence of connected devices. This initiative includes personalized AI-powered appliances such as refrigerators, washing machines, and vacuum cleaners that learn from users’ routines to optimize performance and efficiency.
Samsung also plans to incorporate advanced security features into its home devices by leveraging Knox technology to protect user data. Despite potential short-term challenges, including weaker smartphone demand and global economic uncertainties, Samsung officials remain optimistic about the company’s ability to grow through AI innovations. The focus on AI-enhanced smartphones, premium tablets, and connected devices is expected to drive growth in both the consumer and enterprise sectors.
Connected Device Ownership on the Rise
This emphasis on AI aligns with broader market trends. Research from PYMNTS Intelligence reveals that the average consumer now owns six connected devices, with millennials and bridge millennials leading at seven devices on average. The study highlights increased adoption of smart home technologies, such as smart refrigerators and connected thermostats, which have seen ownership increases of 4% and 5%, respectively, from 2019 to 2023. Additionally, there has been a 31% rise in consumers using smart devices for home security.
Looking ahead, Samsung expects its investments in Smart Home technology and AI to help drive recovery in earnings despite a challenging market landscape. The company is optimistic about the potential of its Home AI initiatives to create new revenue streams and improve customer engagement as it continues to innovate within the smart home sector.
According to executive vice president Jaejune Kim, “we expect AI demand to continue its momentum.”
KL Roh, vice president of visual display, noted, “we will integrate AI in all connected device experiences based on SmartThings and on the home AI business for hyperpersonalized consumer experience. At the same time, we will extend our lead in the AI screen market by expanding adoption of security technology based on Samsung Knox, our in-house security solution.”
- Samsung’s strategic focus on AI and smart home technologies is a response to mixed financial results in 2024.
- The company aims to leverage AI to enhance its SmartThings platform and create personalized home experiences.
- Research indicates a growing trend in connected device ownership, with consumers increasingly adopting smart home technologies.
- Samsung remains optimistic about its ability to drive growth through AI innovations despite market challenges.
As Samsung continues to navigate the complexities of the tech industry, its commitment to AI and smart home technologies positions the company to capitalize on emerging trends and drive future growth. With a focus on innovation and customer engagement, Samsung is poised to lead the charge in the next era of connected living.
Originally Written by: PYMNTS