Samsung and LG Focus on AI in Smart Homes
Samsung and LG are continuing to integrate artificial intelligence into their smart home devices and platforms. The companies are pushing for more advanced home automation, from AI-powered security systems to robotic appliances. The trend mirrors a broader industry shift toward creating more integrated and intelligent living spaces.
- LG is pursuing acquisitions to bolster its smart home ecosystem, recently acquiring an 80% stake in Dutch smart home platform company Athom with plans to purchase the remaining 20% within three years. Samsung has also been active, acquiring British startup Oxford Semantic Technologies to integrate its "knowledge graph" AI technology into products from mobile devices to home appliances. - A key financial divergence exists between the two companies' appliance divisions; securities firms have forecast an annual operating profit margin for LG's home appliance division around 6-7%, while projecting that Samsung's division could post losses for three consecutive quarters. - The push into AI-driven services reflects a strategy to improve valuation multiples; while the smart home tech and services space has seen multiples in the one-to-two-times EBITDA range, broader IoT companies have traded at a median EV/Revenue multiple of approximately 3.4x. - At CES 2024, LG unveiled a mobile, two-legged "AI Agent" for the home, which is equipped with the Qualcomm Robotics RB5 Platform to enable on-device AI features like facial and user recognition. - LG is building a recurring revenue model through its appliance subscription business, which saw revenues increase by 45% year-on-year in the first quarter, reaching 501 billion won. - The broader smart home market was valued at over $127 billion in 2024 and is projected by Fortune Business Insights to grow to more than $633 billion by 2032, signaling a significant addressable market for these AI initiatives. - To create a more integrated user experience, Samsung is leveraging "Spatial AI" for its SmartThings platform, which helps devices understand the user's living space and routines to enable more personalized home management. - Despite their rivalry, both Samsung and LG are members of the Home Connectivity Alliance (HCA), an initiative to ensure cloud-to-cloud interoperability, allowing consumers to control smart appliances from various manufacturers through a single app.
