Site Last Updated 11:09 pm, Saturday

YOON C Lee, a Samsung Electronics Co executive, is giving a tour of his US home in Oakland. He shows off his living room and foyer, then takes a look outside to check the garden. He considers turning on the sprinkler system before deciding the plants have enough water.

The thing is, hes not actually in California. Hes 8,000 miles away with a reporter in a Seoul conference room. Lee, a tall, 49-year-old, is at a huge table fiddling with a Galaxy S5 phone thats streaming live video from the US.

This is Samsungs next big bet as it works to build a future beyond mobile phones, where earnings are tumbling. Lee and his colleagues are trying to create another hit from whats known as the Internet of things, technology that stitches together phones, cameras, sprinklers and roads. If they succeed, the effort could propel sales of the companys electronics, appliances and chips for a generation; if they fail, the troubles will likely deepen.

Imagine if all the dumb things around you can be connected, said Lee. For Samsung, this is a big new opportunity, a huge paradigm shift. It will benefit us across all businesses.

Samsungs Internet push comes just as Apple Inc, Google Inc and dozens of others are sizing up the same opportunity. Techs giants are all vying for leadership and collaborating where necessary. The market for the Internet of things is projected to hit US$7.1 trillion by 2020, according to the research firm IDC.

In a sign of how seriously Samsung is taking the effort, the company is transferring about 500 engineers from its mobile-phone division and allocating them largely to the Internet initiative, according to people familiar with the matter. The shift also reflects recognition that the Suwon, South Korea-based company needs another hit after smartphones, they said, asking not to be identified discussing internal matters.

This is a must-have market for Samsung, said Neil Mawston, executive director of the research firm Strategy Analytics. The Internet of things will be too big to ignore.

The mobile-phone unit is faltering as Apple offers bigger screen iPhones similar to Samsungs marquee Galaxy range and Chinese newcomer Xiaomi sells stylish phones at low prices. In the most recent quarter, Samsungs mobile profit tumbled 74 per cent, dragging net income down by 49 per cent from a year earlier.

The Internet of things represents the third revolution in information technology, after the PC and the Internet, Michael Porter and James E Heppelman wrote in this months edition of the Harvard Business Review. Its implications go beyond the increasing number of smart, connected products in the world and are much more than simply a way to transmit information, they wrote.

With more everyday things connected to the Internet, products will have expanded capabilities and the data they generate may change how companies compete and the boundaries of competition, Porter and Heppelman said.

Read more from the original source:
Site Last Updated 11:09 pm, Saturday