Monday, December 22, 2014

How Samsung became the king of CES and where it's going next

Long before Transformers director Michael Bay choked onstage at Samsung's lavish CES 2014 press conference, the Korean company was just another electronics outfit begging for attention. But after decades at CES, Samsung is now the undisputed king of the show. Its blowout media events are the largest and most difficult to get into. Samsung Electronics CEO BK Yoon is kicking off the show next month by hosting the prestigious opening keynote. And it's one of the few tech giants left standing at CES, as Microsoft and others abandon it. Samsung's glorious rise mirrors its ascent in the mobile industry, and it's also yet another example of the company's oft-repeated formula for success: Time, money and perseverance lead to victory.
Long before Transformers director Michael Bay choked onstage at Samsung's lavish CES 2014 press conference

A Look Back

Samsung Electronics, the consumer technology subsidiary of the 76-year-old Samsung conglomerate, was founded in 1969. It's what we typically refer to when we talk about Samsung (its parent company is involved in drier business like insurance and petrochemicals). Samsung started out in home electronics by making black-and-white TVs and refrigerators during the '70s. It didn't waste any time ramping up its offerings, though: It quickly expanded to color televisions and microwaves later in the decade. Samsung also began exporting its wares and launched an American outpost in 1978 with international expansion in mind. A merger with the conglomerate's semiconductor business in 1988 also set the stage for Samsung Electronics to become the chip giant we know today.

Samsung continued to make plenty of consumer gadgetry through the '90s -- its 10 CES Innovation Award winners in 1997 included a DVD player, computer monitor and fax machine -- but really, it was a decade where the company spent far more effort establishing itself as a component giant. On top of its innovations in the memory market, Samsung developed its first LCD panel in 1995, created the world's first 30-inch LCD screen in 1997 and by 1998, it led the LCD market. That was long before LCD screens were commonplace, but it certainly put Samsung in a comfortable spot by the time that technology invaded every screen in our lives.
Long before Transformers director Michael Bay choked onstage at Samsung's lavish CES 2014 press conference.

The HDTV era

Samsung was no stranger to CES, but the post-2000 HDTV race gave the company something truly impressive to have attendees drool over: giant TVs with resolutions far beyond what anyone had in their living rooms. HDTV was something the CES crowd had been dreaming about for over a decade (it was a major story in Wired's first issue in 1993), but with the dawn of the new millennium, it was finally within reach. Like most other TV makers, Samsung showed off a range of HDTV options at CES throughout the 2000s, including LCD, plasma and DLP sets. HDTVs were the ideal new technology for CES -- it was the rare innovation that actually lived up to years of hype drummed up by the show, and it was so transformative it was worth fighting the horrendous CES crowds to see.
Long before Transformers director Michael Bay choked onstage at Samsung's lavish CES 2014 press conference..

The mobile revolution

Samsung was already a player in the mobile world long before the iPhone hit the scene, but with smartphones it had the opportunity to bring together all of its component smarts in a single device. And it probably helped that Samsung manufactured Apple's iPhone processor (up to and including the A7 in the iPhone 5s). With its expertise developing LCDs, memory chips and processors, Samsung was in a far better position than any other company to develop a true iPhone competitor. (Nokia could have been a contender, but... well we know how that turned out.)

With the announcement of the Galaxy S in March 2010, Samsung made it clear it wanted to be a big deal in mobile. Notably, the company announced the phone at the CTIA conference that year -- not CES. But the Galaxy S, and indeed all of Samsung's follow-up devices, were a big part of its CES presence over the following years. Rather than being a place to launch its new devices, CES was like a pageant that allowed Samsung to flaunt its consumer technology strength.

The Road Ahead

Samsung's still holding onto its mobile throne, even though its market share has been steadily slipping over the last few quarters. In particular, it's being threatened by Chinese phone makers like Huawei (which will be at CES) and Xiaomi (which won't). They're developing powerful phones that are also surprisingly affordable -- something Samsung hasn't yet figured out.

But the company is also looking beyond mobile. Yoon (above) says his CES keynote will focus on the internet of things (IoT) and how it will "unlock infinite possibilities." Samsung snapped up the IoT company SmartThings last August, so it's likely planning a way to repeat its mobile success with connected devices. Just like HDTV, IoT is one of those things CES presenters and attendees have been talking about for years. But unlike HDTV, it's not clear yet why mainstream consumers need connected devices.

The challenge for Samsung and every other IoT company is figuring out a way to make connected devices seem more than just hype. Nest and Quirky have been doing a decent job of selling their wares to early adopters, but for IoT to succeed it'll need to appeal to everyone. And that'll be much tougher than just getting people to buy a shiny new phone.