Samsung chairman presses for breakthrough in AI home appliances as competition stiffens

Samsung Electronics Executive Chairman Lee Jae-yong visited the offices of the home appliance division to be briefed in the state of the market with the return of executives from IFA 2024.

Samsung Electronics Executive Chairman Lee Jae-yong returns to Gimpo Airport on Aug. 7 from a business trip to the Paris Olympics. [NEWS1]

“Is this our own licensed technology?”

Samsung Electronics Executive Chairman Lee Jae-yong underscored the need to get ahead in the AI game as he asked the pointed question to the company’s home appliances division. There’s a lot at stake, after all — Samsung Electronics is gunning for a breakthrough with AI home appliances as profit from household goods falls on lower demand amid a global recession as well as stiff competition.

Lee’s remarks came during his first visit to the home appliances division in Suwon, Gyeonggi, this year. Industry insiders view his on-site examination as a gesture of encouragement, but also a sober warning to the company’s employees about the reality it faces.

The chairman on Monday met with executives, including Device Experience division head and Vice Chairman Han Jong-hee, at the offices of its home appliances business in Suwon before looking at AI-powered products and technology and Samsung’s strategic road map for developing technology for each item, according to Samsung Electronics on Tuesday.

Samsung Electronics introduces its Neo QLED 8K AI television at a press conference on Sept. 5, a day ahead of the IFA 2024 trade show. [SAMSUNG ELECTRONICS]

Around 10 executives including Han who had returned from IFA 2024 in Berlin, Europe’s largest home appliances trade show, were reportedly on the spot to directly report to the chairman.

Lee reportedly questioned them on “how far ahead” Samsung was and on "the momentum of the technology being developed.” He grilled the executives on their thoughts on IFA, especially on how the company will differentiate itself from Chinese home appliance companies.

He was also briefed on competitors by sector and major firms by region in addition to Samsung’s AI strategy for home appliances.

The chairman’s schedule became known to company employees after it was posted on Samsung Electronics’ announcement board.

“While it wasn’t completely irrelevant to China, it was more about emphasizing a fundamental competitiveness,” Samsung Electronics said about the visit. “Chairman Lee is reviewing the current state of [all] business sectors.”

Samsung Electronics' ″Bespoke AI Laundry Combo″ appliance, which washes and dries clothes, was shown at IFA 2024 in Berlin, Germany, that ran from Sept. 6 to Sept. 10. [SAMSUNG ELECTRONICS]

The Suwon office Lee visited on Monday is a hub for research and development and marketing for Samsung Electronics’ AI home appliances division. During the chairman's visit to the display division in March of last year, he specifically asked the team, which is in charge of television business operations, develop a way to connect Samsung’s robot ball, Ballie, with a wearable device after seeing a demonstration of the AI-powered robot.

“Think of ways it can be used in tandem with wearable Galaxy products,” Lee had said, specifically adding that “it would be nice if a function for single elders could be added.” Chinese AI home appliances put Samsung on alert

The chairman’s actions are interpreted to be in line with a sense of crisis brewing in the domestic home appliances industry over the sudden rise of Chinese firms to become strong competition.

Chinese appliance makers in the past mainly put out cheaper copycat versions of Korean products, but are now launching goods that use advanced technology. Consumer goods company Roborock, for instance, has topped the Korean market for the last three years with a robot vacuum cleaner that is equipped with AI. It also clinched the top spot in the global market last year after its products became popular in Northern European countries such as Norway and Sweden as well as in Germany and Singapore.

German chancellor Olaf Scholz, third from left, poses for a photo with other German politicians and Samsung Electronics executives in front of the Korean tech firm's booth at IFA in Berlin, Germany, on Sept. 6. [SAMSUNG ELECTRONICS]

Chinese companies were also the talk of the town at IFA. A total of 1,300 Chinese firms were present at the trade show, 10 times more than the 127 Korean companies participating. Major brands such as Hisense, Haier, Midea and TCL set up large booths and launched new products with cutting-edge technology. William Cho, CEO of LG Electronics, the world’s largest home appliance manufacturer, praised Chinese firms’ technology at the expo on Sept. 6.

Samsung has been focusing its efforts on incorporating AI in its household devices this year, with a strategy to improve its licensed technology to differentiate itself from Chinese manufacturers.

“Our first priority is improving our [technology] to provide a connected experience [for users],” Vice Chairman Han said at IFA on Sept. 7, adding that chairman Lee “asks for products that set Samsung apart and are in demand and acknowledged [for their quality] by customers.”

BY HWANG SU-YEON, KIM JU-YEON [kim.juyeon2@joongang.co.kr]