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Samsung bursts onto IoT market with low-cost chips

Samsung is hoping to capitalize on the burgeoning IoT market with the launch of Artik. Also in Searchlight: Google's self-driving cars are set to hit the road this summer; Verizon buys AOL.

Samsung, in daily battle with Apple for the title of world's top smartphone maker, has set its sights on conquering another mobile domain. This week, the technology giant unveiled Artik, a new platform built around a family of low-cost, low energy chips optimized for the Internet of Things (IoT).

Artik merges hardware and (a lot of) software with the intent of accelerating the development of connected products and services. The platform is designed to work with Samsung appliances and products that run on Samsung-made chips, but the company's ambitions for Artik extend beyond its fast-growing appliance business.

"By leveraging Samsung's high-volume manufacturing, advanced silicon process and packaging technologies, and extensive ecosystem, Artik allows developers to rapidly turn great ideas into market leading IoT products and applications," said Young Sohn, Samsung's president and chief strategy officer, at the Internet of Things World conference in San Francisco. The company is investing $15 billion in IoT research and development.

Translation for CIOs: Get ready. Samsung, along with Intel, Qualcomm and others, is doing everything it can think of to make it easy for developers, your company, competitors and competitors you've never heard of to jump on the IoT bandwagon.

Everyday low price, and going lower

The first major selling point? The technology is cheap. There are three variations of Artik, ranging from a tiny, low-power 12mm by 12mm chip up to a larger chip complete with nearly all the features of a smartphone. Applications range from sensor pads, fitness trackers and smartwatches to home hub systems, drones and beyond. The smallest chip is valued at less than $10; the largest at less than $100.

"The economics is the real story here," Glenn O'Donnell, Garter analyst, said in an email. "These Samsung devices are as low as $9, but next year the cost will probably be $3 and then 50 cents the year after. When it only costs a few bucks or less to instrument something, the use cases will explode. Much of what we will do with this stuff in three years is inconceivable today."

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The low cost of Artik chips should spur the imaginations of everyone from consumers to CIOs, according to O'Donnell. And the possibilities are endless, he added, pointing for starters to Next Thing Co.'s C.H.I.P., branded by the crowd-funded startup as the world's first $9 computer. At $9 developers will be able buy the tiny computer, build a smart connected product on top of it and then sell the end device at a far cheaper retail price, according to Fortune's Stacey Higginbotham, than devices built around other chips.

Further proving that it's all in when it comes to the IoT, Samsung also used the Internet of Things World conference to announce the launch of SmartThings Open Cloud to help developers create apps for their connected devices. SmartThings, a smart home startup, was acquired by Samsung last August..

"This combination of Artik processors and the SmartThings Open Cloud provides connected product manufacturers with a comprehensive solution to help them simply and efficiently develop smart connected products," Gartner analyst Michele Pelino wrote to me in an email.

IoT market reality check

There is another type of cloud over all this sunny news. Samsung is going after the IoT market at a time when earnings from its core smartphone business are taking a beating from Apple and upstart Chinese phone makers. Moreover, the Artik processors face stiff competition from a line of similar platforms by Intel, Qualcomm, and startup Next Thing Co.; all scrambling to take advantage of the surging IoT movement.

The big concern for CIOs, said Frank Gillett, vice president and principal analyst at Forrester Research, is that Artik is a sign of the immaturity of the IoT market.

"Someday things will get more standardized, but for the next few years, it's going to be a wild, messy environment," said Gillett of the clamber to mine the IoT repository.

This will be a real challenge for CIOs as they try to navigate the thicket of IoT-centered products entering the market. In order to capitalize on IoT, CIOs and their product engineers need to pay attention to products like Artik, Gillett said, but their options are "products that could be in the field for a couple of years or a couple of decades."

No matter. The boom is on, the gold rush well underway. CIOs, get out your shovels and pans.

CIO news roundup for week of May 11

Here are more technology headlines from the week:

  • It's not just reckless drivers you have to watch out for on the road anymore; it's reckless cars. Google said Monday that its self-driving cars have been involved in 11 minor accidents over six years. Google claims the workers behind the wheel were responsible for the accidents and not the cars themselves. The cars are expected to hit the public road this summer.
  • Mobile is a hot commodity: Verizon bought AOL this week for $4.4 billion to lock down AOL's mobile data and mobile ad and video technology. "Mobile is the centerpiece," said AOL CEO Tim Armstrong. "We need to be on every single screen."
  • It's never too soon for another iPhone upgrade, right? The upcoming iPhone 6S is expected to have substantial upgrades -- including a new Force Touch feature and more powerful processor -- in order to keep up with competition from Samsung and Android phones, according to analysts.
  • Microsoft's Windows as a Service is set to upend the way CIOs work by having them deploy ongoing incremental updates rather than perform one massive Windows upgrade every five or six years. Microsoft said it is working with CIOs and IT teams to help manage this transition.
  • Facebook's new in-app search engine pilot program invades Google's turf by allowing users to search within the iOS app to quickly find and share a link among friends. The goal of the "Add a Link" feature is to get you to spend more time on their app and less time on others --like Google.
  • Sidecar reaches a new high with the announcement of their medical marijuana delivery service pilot program in San Francisco. "SideCar is able to power the on-demand economy, and medical marijuana is an example of all kinds of products we can deliver," said SideCar CEO Sunil Paul.

Next Steps

For more on IoT, read about how the Whirlpool CIO is welcoming the future of IoT. Then, discover how CIOs will architect the Internet of Things.

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How do you think low-cost IoT-centered chips will change the enterprise?