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When Samsung and LG meet automakers…

January 10, 2014

New business opportunities evident in ICES show in Las Vegas

as convergence of two industries will unfold down the road

Visitors try out next-generation smart car technology at Kia Motors’ booth at the 2014 International Consumer Electronics Show at the Las Vegas Convention Center. (Courtesy of Kia Motors)

By Kim Yoo-chul

LAS VEGAS ― Global automakers are taking center stage at the 2014 International Consumer Electronics Show (ICES) as connected cars are emerging as new business opportunities for both carmakers and electronics companies.

The new trend is considered a good example of how the convergence of the two industries will unfold down the road. They seek to create an open system that interacts between smart devices and cars to attract younger people.

Against this backdrop, major auto companies are unveiling various concept cars equipped with advanced technologies, which many believe is redefining the future of the automotive industry.

Major electronics giants, including Samsung and LG, are in talks with carmakers to find new business opportunities on the sidelines of the technology show, which will last through today (KST).

“As the auto industry evolves, technology is a key to future growth. Consumers continue to return to showrooms in large numbers, demanding increased fuel efficiency and connected options in their autos,” said John Waraniak, vice president at Vehicle Technology, Specialty Equipment Market Association (SEMA), in a session with international media, at the Las Vegas Convention Center (LVCC), the venue for the show, Thursday.

Samsung Electronics’ Galaxy Gear smartwatches are on display at the booth of BMW along with the automaker’s i3 electric vehicle at the 2014 International Consumer Electronics Show. (Yonhap)

Under the theme of “Connect2Car, If You’re Not Connecting, You’re Interrupting,” the session moderator said the challenge remains on how effectively systems, apps, content and context get installed, upgraded and integrated into vehicles and consumer lifestyles.

Experts said that automotive electronics has emerged as one of the top trends in the exhibition alongside UHD TV, 3D printing and wearable devices.

“Automobiles are meeting techs. It’s interesting to see how collaboration between automakers and technology innovators is leading both industries forward,” said Grace Ellis, coordinator of the Innovation Movement at the Consumer Electronics Association (CEA), the show organizer, at the press center, the South Hall, LVCC.

Nine carmakers including Kia Motors, BMW, Mercedes-Benz, Toyota, Ford, General Motors and Chrysler are at the exhibition, setting up a “big booth,” CEA officials said. Last year, six automakers attended the show.

“We are seeing an increased penetration in electric vehicles, next year even module systems will be developed as a matrix system which can control all car parts with a single module. That’s why technology companies have no doubt that automakers will save them amid the challenging situation in the business-to-consumer (B2C) market,” said an official at Audi, at its booth, the North Hall, LVCC.

Audi, which has come to the show for the fourth straight year, has unveiled “Audi Connect” technology using the fourth-generation Long-Term Evolution (LTE) wireless network by partnering with AT&T, a major U.S. mobile carrier, which is also one of the big partners of Samsung Electronics.

BMW partnered with Samsung Electronics, allowing its i3 electric vehicle to interact with the Galaxy Gear, while Mercedes Benz and General Motors (GM) also introduced apps, and advanced car infotainment systems.

Ford and Toyota stole the limelight by exhibiting a solar-powered hybrid vehicle and an electric racing car, respectively.

New businesses for Samsung, LG

Toyota’s i-Road concept vehicle sits on display at the 2014 International Consumer Electronics Show in Las Vegas, Wednesday. (UPI-Yonhap)

The new trend in the technology world is giving more business opportunities to leading technology firms including Samsung and LG Electronics as the car-related market is a new segment that is very promising and highly lucrative, officials at the Korean companies said.

“Samsung’s conventional business models are being challenged. For example, the smartphone market will see flattened growth, while demand for TVs will grow at a limited pace, pushing us to seek new business chances. The partnership with BMW is part of our strategy migration into the car-related business,” said a company official in a brief interview.

Samsung’s biggest rival LG Electronics had several talks with automakers behind the scenes to win orders from GM, Ford and Hyundai-Kia to supply its advanced car-infotainment systems, said LG officials.

LG Chem, the chemical affiliate of Korea’s LG Group, supplies rechargeable batteries for electric vehicles to Ford, GM and Hyundai-Kia. LG Electronics, which recently launched a vehicle component business division, is closely collaborating with LG Chem to lift business-to-business (B2B) focused on car-infotainment systems to be used in upcoming electric vehicles from LG Chem’s car clients.