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Google poaches IoT exec, what does this mean for Samsung’s software ambitions?

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Google has hired former Samsung mobile communications CTO Injong Rhee who will now lead the internet giant’s move into IoT under the very glamourous job title of Entrepreneur In Residence.

Rhee, who left Samsung in December, was responsible for several heavyweight products at Samsung including Knox, its enterprise security platform, and mobile payment solution Samsung Pay. Specifics of Rhee’s role in Google is not entirely clear just yet, but he will lead the IoT business unit, reporting into Diane Greene, CEO of Google Cloud.

“IoT is a new and exciting space with tremendous potential to transform how we use and deploy technology in our everyday lives,” Rhee said in a LinkedIn post.

“Google and Alphabet have many IoT related products and assets. One of the first things I would like to do with my Google colleagues is to get these efforts coordinated and aligned toward a concerted IoT story of Google — in the process, create distinct consumer and enterprise product lines.”

While this is certainly a positive move for Google, a company seemingly on a never-ending quest to diversify, it is less promising for Samsung. Samsung is a business which has been searching for future relevance and losing a senior executive is never a good sign for a business.

While Samsung is still the leader in the smartphone global rankings, it hasn’t been able to emulate Apple is collecting the profits. This is not to say the mobile is not making money, more that Apple has done an excellent job in monopolizing smartphone profits. Software and services has been one of the areas Samsung has been looking to for differentiation and additional revenue streams.

Bixby, Samsung’s own digital assistant, is a good example of how the Koreans want to be more involved in the consumers lives, but acquisitions such as cloud provider Joyent (which Rhee was responsible for) could be viewed as a strategy to be more than a simply a smartphone brand. With the connected economy just around the corner there are profits to be made in the software game where recurring revenues can be realised, but losing such a senior executive will surely dent the Samsung ambitions.

Apple is perhaps the only brand which can survive in product mode. We’re not suggesting the iEngineers aren’t working on improving the software side of the business, but such is the level of brand loyalty the company will be able to continue making money off products for at least the foreseeable future. Other brands, who customers are a bit less sticky, will have to throw a horde of new features and software at the consumer to demonstrate the attractiveness of their devices. Such is the minimal differentiation which we are seeing in the devices market.

The hire gives us insight into yet another disruptive play from Google, but also puts a bit of a dampener on Samsung’s connected dreams. Rhee has been credited as the driving force behind Samsung’s positive moves into the world of software and will be a notable loss for the firm.

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