Samsung’s Surveillance Song to Remain the Same

Tom Cook, vice president, sales, Samsung Techwin America, says all systems go for 2015 and beyond following investment by Hanwah Group.

In the storm of ambiguity that kicked up on word that Samsung was selling its video surveillance business, obvious questions and conjecture ensued. What would become of the colossal brand in the marketplace? The $200 billion Samsung kingdom couldn’t be bothered by trifling security industry stakes? Would Samsung Techwin stock buyer Hanwah Group dare take a run at introducing itself as a newbie security player?

To help bring clarity to some of the questions and fill the information void, Samsung Techwin America arranged a phone conference with several industry trade publication editors on Monday. Tom Cook, vice president, sales, Samsung Techwin America, spoke and we queried him over the course of about 35 minutes. 

Cook was quick on the draw. What changes will befall the current iteration of Samsung Techwin’s North American operations? None. Of any sort, he said from the get-go. Least of all the branding, which apparently was a key negotiation point between Samsung Holding Group and Hanwha Group. 

“We have always been Samsung Techwin, which is a publicly traded company separate from Samsung Electronics. All of our R&D, all of our manufacturing is done under Samsung Techwin facilities. It will continue to be Samsung Techwin facilities – manufacturing, planning, sales and marketing. That won’t change,” Cook said.

It’s full steam ahead into 2015, the company wants the industry to know. According to Cook, Samsung Techwin will not suffer from pains common to full-scale acquisition. This was a partial stock purchase. Hanwha Group bought a 32% stake in Samsung Techwin. That makes the conglomerate the largest shareholder, followed by the Korean government’s pension plan. There are other smaller shareholders, then it’s open to the public. 

Hanwha Group does not manufacture video surveillance equipment or anything related to the security industry that they otherwise would look to combine and assimilate. Cook defined the transaction as “an umbrella changing.” Meaning, all the machinations operating below the corporate keepers will continue to function undisturbed. Further, it was agreed upon that Samsung Electronics and Samsung Techwin will continue all their current partnerships, whether that’s sharing technology or other joint efforts.

“The Samsung Techwin CEO [Soon Hong Ahn], all of our executive management, our management team in the U.S., everyone stays intact. The business strategies are in place for the next two to two-and-a-half years on the product line,” he said.

Cook went so far as to lift the curtain briefly to tease upcoming product releases scheduled to be unveiled at ISC West 2015.

“We anticipate the very exciting news in the first half introducing 5-megabyte cameras, 4K cameras and all-in-one IP kits, which we feel the market is now ready for.” The latter are preprogrammed four-, eight- or 16-channels kits. There will also be a whole new lineup of LiteNet cameras, which are aimed at competing with “a lot of the lower-end players that are trying to enter the U.S. market,” Cook said.

Quite an arc it is that traces the two points between the brand-could-die-off supposition to Samsung-Techwin-aims-to-kick-butt-in-2015 banter. To emphasize the latter, the company has spent the last two weeks contacting its salespeople, integrator partners and end users to explain its commitment to the North American channel.

“We are very fortunate that about two years ago we made a major investment in increasing our salesforce and developing a sales channel management that would attack the market aggressively,” Cook explained. “We also introduced our product line of WiseNet III, which hit the sweet spot. Our growth has been phenomenal over the last two to three years … about 40% last year [2013] and about 70% over last year to this year.”

Cook expects when the research firm IHS releases its next video surveillance market report in May, “we will be in fourth position in video products in North America. Out of the companies ahead of us, we believe two out of the other three are declining in sales and market share. We actively understand by the end of 2015 we should be in a position of second.”

Bold prediction, eh? You can share your thoughts, projections or other suggestions on that claim if you so choose in the comments section below.

I can’t vouch for IHS’ numbers but I take Cook at his word when he says expect Samsung Techwin to invest like it has in the past. The company is adding 12 to 15 employees, most of them in the “sales arena” in the next 90 days, he said. “We will continue to market ourselves aggressively. At ISC West we will do a national dealer meeting and an A&E meeting to really push the limit that we haven’t done in the past.”

Evidently there will be no escaping the Samsung brand at ISC West or ASIS or at numerous other industry conferences in 2015. At ISC West alone you will trek through 6,000 square feet of strategically positioned Samsung booth real estate.

“[The booth footprint] will mimic basically the same size as the leader in our video [surveillance] industry. We are their neighbor at that show purposely. We feel we can take them head on and grow our market share aggressively in 2015 as we have in 2014.”

As to why Samsung Holding Group would divest its video surveillance business (a veritable blip in their grand scheme of things) as part of a much larger reorg, Cook said he was not given an explanation why the group decided to sell its shares in Samsung Techwin.

Management is also left to speculate about Hanwha Group’s specific interest in video surveillance, although there are some obvious synergies, Cook explained. For one, Hanwha Group does have a system integration division that could benefit from selling Samsung Techwin products in the Asian market.

Hanwha Group is one of the largest business conglomerates in South Korea. It operates global subsidiaries in manufacturing and construction, finance and insurance, services and leisure, and other industries. Does Samsung Techwin expect Hanwha Group will invest hard cash in its future growth?

“I hate to assume, but they are acquiring this stock because they are interested in growing the security and defense divisions. My assumption would be yes,” Cook said. “We have never been held up because of resources and investment in the past.”

Samsung Techwin is developing a new digital signal processor (DSP) called WiseNet IV, which will eventually find its way into video surveillance cameras and military equipment that likely interests Hanwha Group,  Cook said.

“There is a roadmap for us. It is high megapixel, 4K, on H.265. It takes on a whole new aspect of commitment that Samsung Techwin has with the investment of whichever holding group is involved that we continue to grow our products line for the future to be No. 1,” Cook said. “That is our goal in video surveillance.”

About the Author

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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