Samsung Electronics vice chairman Lee Jay-young is making a big push to absorb young tech firms around the world as part of efforts to create new software and service offerings and finally secure new revenue sources.
Since chairman Lee Kun-hee was hospitalized after suffering a heart attack in May, the Korean tech giant, led by the son, has acquired or invested in 11 international start-ups. This compares with 18 acquisitions made between 2007 and 2013.
For South Korea’s family-run conglomerates, acquiring another company is usually a time-consuming process in which every phase of the decision should be confirmed by the charismatic chairman.
Samsung Electronics vice chairman Lee Jay-young (Yonhap)
The Samsung heir’s unusually speedy management hints at a sign of change not just at Samsung but also in the nation’s long-held corporate culture.
The acquisitions are largely led by the company’s Open Innovation Center in Palo Alto, California, which acts as an investing arm and start-up accelerator for U.S. companies that Samsung is interested in.
In response to the uncertain smartphone outlook, one of the key focus areas for Samsung, the world’s largest smartphone-maker, has been the Internet of Things. The company recently announced it would sync up all its connected gadgets by 2020.
In recent months, Samsung acquired SmartThings, a platform developer for smart home devices; Quietside, a distributor of heating and air conditioning products; and Proximal Data, a solid-state drive software company, all of them based in the United States.
Other buyouts included Canadian mobile printing solution company PrinterOn, Israeli sensor technology company Early Sense and Brazilian printing solutions company Simpress.
And the most important acquisition came last week ― LoopPay, a U.S.-based mobile payments technology start-up. In the red-hot mobile wallet market dominated by Apple and Google, Samsung is expected to launch its own service system soon to compete head-on with its powerful rivals.
In the latest software push, Lee has met several CEOs of international software companies like Satya Nadella of Microsoft and Mark Zuckerberg of Facebook. On Tuesday, he also held a meeting with Peter Thiel, cofounder of PayPal.
Industry watchers say the new businesses are still in their investment stages and years away from making a significant contribution to the company’s bottom line.
The Samsung heir will face a stern test, they said, until there are tangible results.
“Lee needs to prove his business skills and leadership before he takes full charge. Until then, diverse attempts, including acquisitions, will be tried,” said a source.
By Lee Ji-yoon (firstname.lastname@example.org)