Samsung tossed its hat into the broad-based networking market today, looking to capitalize on the convergence of wired and wireless communication.
For several years, companies have been talking about bridging the worlds between cellular and land-line phones, allowing consumers to use the same phone when they walk out the door of their home in the morning, continue the same conversation on their morning commute and even when they sit down at their desk at the office. Samsung, which has a strong position in a variety of telephony markets, as well as video and, more recently memory, will work to drive the convergence of all those sectors. If it is successful, it may be able to reap profits from all of those areas.
“We see incredible opportunities to address the new growing market, where a single converged network providing voice, data, and video over any access medium is increasingly becoming wireless,” said Youngsoo Ryu, general manager and senior VP at Samsung, in a statement. “Taking historical technology advancements as evidence, all access to the network will be done wirelessly in the near future, and we certainly intend to be a driving force as this market develops."
The sticking point may be more the infrastructure to support the move than the availability of the handset technology, however. While cellular services are almost ubiquitous, connections to high-speed internet and land-line phone service vary by geography, and even within the same country. For example, South Korea is currently the world leader in fiber to the home, and Japan is forging ahead with 3G services. In North America, in contrast, there is a mix of everything from DSL to cable to fiber for Internet access, with efforts under way to maximize existing infrastructure in many areas rather than dig up streets to put in new lines.
Where new phones ultimately can fit into these different markets, and how much companies can charge for them, vary greatly. Samsung will focus on four areas where it sees opportunities in convergence: networking infrastructure, voice communications, mobility and security. On the infrastructure side, the company will introduce its Ubigate iBG series, for routing, switching, security and voice integration in a single platform. It will support both analog and digital voice interfaces, as well as IP telephony, effectively allowing users to pick whatever works for their particular area.
Samsung will introduce a small business version this year, with an enterprise version in the second quarter of 2007. Both introductions will put the company on a direct collision course with such established giants as Cisco Systems and China’s Huawei.
The approach is not out of the ordinary for Samsung, which has shown its willingness to wage war against entrenched competitors. Its push into flat-panel televisions in the past several years was a direct assault on Sony. It recently announced that it would spend $33 billion over the next six years on capital equipment and open its doors to merchant foundry services, going head-to-head with such established companies as TSMC and UMC. The company also has made aggressive pushes into the memory market and into the cellular handset market, even though it was a newcomer in both of those markets.
