(Update: The deal is not done yet, says another.)
SmartThings is in the home automation space, and allows you to connect devices like lights and doorlocks to a system controlled by your mobile phone. It has raised over $15 million from investors including Greylock, Highland Capital, First Round Capital, SV Angel, Lerer Ventures, Yuri Milner’s Start Fund, David Tisch, A-Grade Investments, CrunchFund* and Box Group.
Samsung most likely bought the startup to get out ahead of Google’s Nest efforts. With this buy, Samsung obtains a mature home automation platform that just needs some marketing help. And Samsung has a hefty marketing budget.
The larger arena at work here is the millions of connected devices that will populate our world — commonly referred to as the internet of things. In a nearly inevitable future where every device in our home has a live connection to the web, and can be controlled by our devices, device manufacturers are the ones most uniquely poised to offer holistic solutions to consumers.
At least, that’s the marketing line. In reality, this is a sort of protocol pissing contest, with all of the majors duking it out to be the first to own your home and data. What they do with that data will depend on the player. Google might enhance its services (and web advertising); Amazon will try to sell you more stuff, more accurately; Apple will likely continue to utilize privacy as a differentiation, pointing out that it has no interest in your information as long as you keep buying its hardware.
What Samsung has to gain here is a tad more nebulous, though hardware sales of its Android handsets will likely be a big portion of it. Samsung’s smartphone sales continue to fall, and it’s projecting a roughly 22-26% drop in smartphone profits year over year. Now, the Korean megalith may be looking for areas of expansion that will drive its high-end phones, where most of its cash is coming from.
SmartThings had no comment on this story.
*CrunchFund was started by TechCrunch founder Michael Arrington