LG Electronics has acquired Athom, a European smart home company that already sells products in Australia, in a move seen as a way for LG to use its technology to capture information about consumers' home lives and then sell that data to third-party advertisers, just as it does with its TVs and WebOS software.
The company owns 80% of Atom and has an option to acquire the remaining 20% within the next three years.
LG, which makes millions from selling data about the lifestyles of consumers who own LG products, acknowledges that its strategy is to integrate Athom's capabilities with LG's intelligence-gathering technology and use new AI techniques to monitor what's going on in the home.
LG plans to integrate Athom's extensive connectivity, which links thousands of home appliances, sensors and lighting fixtures, with its generative AI-enabled LG ThinQ platform, and then sell data from the platform to third-party advertisers who buy ads on LG TVs.
The company acknowledges that data collection of consumer information will be a big part of its business going forward, and the integration of Athom technology is designed to create an AI home that “understands its customers better.”
LG's AI Home allows customers to work with generative AI to manage their home appliances and IoT devices, creating a personalized environment that matches their preferences.
LG Ad Solutions said that this data is then sold by the company to third parties.
Athom is a technology company that sells Homey, a smart home hub that connects appliances and IoT devices, and also offers a cloud subscription service, another way LG generates revenue.
Homey devices are available in Australia, with the Athom Homey Hub Z-wave SmartHome controller retailing for $599.00.
Athom developed the hub and OS to create an independent smart home ecosystem, and LG now realizes it can use this to generate subscription revenue and collect data about the appliances and services people use in their homes.
You can also monitor cameras connected to the system.
Its flagship product, Homey Pro, can connect to over 50,000 devices and supports a variety of connection methods including Wi-Fi, Bluetooth, Z-Wave, Matter and Thread, making it versatile and open.
The Homey App Store, managed by Athom, offers 1,000 applications for connecting and controlling home devices from brands such as Philips Hue and IKEA.
LG claims that these applications are based on official partnerships, with a number of apps developed by the Homey community.
LG claims that after the acquisition, it will significantly expand access to the Homey system.
This is achieved by integrating the ThinQ platform's smart home technology with Athom's open ecosystem and IoT device connectivity.
The big question is whether LG will actually collect and sell data from third-party devices and services that are integrated into its ecosystem.
If so, this poses a real threat to consumers purchasing the system.
LG executives told ChannelNews that the new technology will provide “deeper insights into customer usage patterns” and speed up the delivery of personalized information and services to LG's ThinQ technology used to collect the information.
“The acquisition of Atom is a cornerstone of our AI Home business,” said Chung Ki-hyun, executive vice president and head of the Platform Business Center at LG. “By leveraging the synergies between the two companies, we aim to expand our open ecosystem and external integration services to provide customers with a more diverse and multidimensional spatial experience.”
ChannelNews understands that Athom will continue to operate independently, maintaining its business operations and brand.
The company has acknowledged that it is shifting from a hardware-centric business to a software-based platform that collects and sells information about consumers who buy its products.
LG entered the TV platform market in 2021 with its webOS platform, expanding its TV business from hardware to software.
To support this transformation, LG has acquired Alfonso, a US-based global technology company specializing in television media, machine learning and big data analytics.
Alphonso now operates as LG Ad Solutions, a core component of the webOS content and services business that sells and collects data.
According to market research firm TechNavio, the global smart home market is expected to grow from $81.2 billion in 2023 to $260.24 billion by 2028, at a compound annual growth rate of 26.23%.
“LG is evolving into an intelligent spatial solutions company that connects and extends experiences across living spaces. We will continue to make strategic investments to transform business paradigms, as evidenced by our continued forays into platform-based home appliance services and solutions, such as the webOS advertising platform and AI Home,” said William Cho, CEO of LG Electronics.
About the Author
David Richards has been writing about technology for over 30 years. A former Fleet Street journalist, he wrote an award-winning series for the Bulletin on the Federal Ship Painters + Dockworkers Union that led to the Royal Commission investigation, and won a Logie Award for Outstanding Contribution to Television Journalism for his story The Werribee Scandal. In 1997 he founded Australia's largest technology media company and prior to that was Australia's third largest PR firm, subsequently becoming the foundation company for Ogilvy PR. He now writes about technology and its impact on both business and consumers.
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