Samsung Surveillance Sold Off

Author: John Honovich, Published on Nov 28, 2014

As part of a major move involving numerous divisions, Samsung has sold off its stake in its video surveillance business.

In this note, we examine the acquirer, Hanwha, their focus and financials, plus raise 3 critical risks that could impact Samsung's positioning in video surveillance.

Hanwha Overview

The acquirer is another Korean conglomerate, named Hanwha. Though Hanwha generates ~$35 billion USD annual revenue, it is only a fraction of Samsung Electronic's size, who generates over $200 billion USD annual revenue.

Hanwha is primarily focused in defense, chemicals and life insurance. Accordingly, it has a very low recognition brand, unlike Samsung, who is routinely ranked as one of the top 10 global brands.

Hanwha is acquiring multiple businesses. In addition to Techwin, Hanwha is acquiring Samsung General Chemicals and Samsung Thales, a defense-oriented business.

Samsung Techwin / Surveillance

Samsung's surveillance offering were not part of the 'main' Samsung Electronics corporation (the business behind the phones, tablets, monitors, etc.). However, until this deal, Samsung was a part owner of the company, named Samsung Techwin, that manufactured surveillance products.

Samsung Techwin's surveillance sales are only a fraction of their business. According to Techwin's 2013 financial report, they did ~$2.6 billion in revenue. More than half of that revenue came from 'defense machines' and 'engine and turbine machinery'. Even within the Techwin division that surveillance falls under, we estimate that is a minority of that division's sales.

The net/net is that the surveillance business is a tiny part of this overall deal and that the strategic focus for Hanwha is the defense / chemical businesses, not surveillance.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Claims 'Business As Usual'

The European security group has come out with a statement:

“Hanwha Group’s investment in Samsung Techwin will enable us to continue research, design, and development of innovative market leading solutions that will create new business opportunities and ensure our future growth,” said Mr Jong Wan Lim, Managing Director of the Security Solution for Samsung Techwin Europe Ltd. “Customers can be assured that it is ‘business as usual’ and that there will be absolutely no disruption to the supply of products or to the normal high levels of pre and post sales support that customers have come to expect from Samsung Techwin.”

Key Risks / Questions

Despite the stock assurances of 'business as usual', we see three risks / questions in this deal:

  • What happens to the Samsung brand? The Samsung brand carries significant weight. Will Samsung surveillance, now Hanwha, be allowed to keep using the former company's brand? If they have to change, it will cause significant confusion and difficulty marketing under an unknown name. [Update: A report from a Samsung Techwin press conference claims that a 'branding agreement [to retain Samsung's name] is still in negotiation, but is assumed to be for “many years”. How many years will be critical. One comparable is the GE Security / UTC deal where UTC was allowed to use the GE brand for 2 years. However, once that period is over, the brand is lost.]
  • Will they continue to bundle / throw in Samsung products? Many industry insiders have mentioned how Samsung Techwin security group routinely throws in Samsung electronic products to help win deals (e.g., monitors). Will they have access / ability to do this now?
  • Most importantly, how committed will Hanwha be to the video surveillance business? Samsung Techwin has been very aggressive the past few years in development, sales and low pricing of Samsung surveillance equipment. Will this continue? Hanwha's primary focus here appears to be the chemical and defense businesses. Will it dedicate resources to the surveillance business or will it be seen as less strategically important?

The deal is not scheduled to close until 'the first half of 2015' which likely means the full impact of this deal may not be clear for a year or longer.

VOTE / Poll

What do you think will happen to Samsung Video Surveillance business?

UPDATE - Now Hanwha Techwin

See: Samsung Techwin Now Hanwha, Overseas To 'Remain Intact' and Goodbye Samsung, Hello Wisenet X

6 reports cite this report:

The Real Samsung Is Back, Launching Extreme Video Analytics on Jun 30, 2016
No, this is not about Hanwha / Techwin. This is about the real / original Samsung group. After selling Techwin, which included their video...
Samsung Losing Its Name and Integrity on Mar 04, 2016
Samsung's video surveillance division told everyone that nothing was going to change. They were wrong, if not lying. They are losing the Samsung...
CDW: We Love You Axis But Here is Samsung for 50% Less on Jun 12, 2015
Axis steering end users to CDW has been a hot topic on IPVM recently. Unfortunately, that admiration is not exactly mutual. Our new Online...
Samsung Techwin Workers Protest + Stock Plunges on Dec 10, 2014
The Samsung sell-off is off to a shaky start. While the US division frantically tries to convince everyone that things are fantastic, worker...
Major Moves - Security Manufacturers 2014 / 2015 on Dec 08, 2014
This guide summarizes the biggest moves of security manufacturers in 2014 and 2015, concentrating on acquisitions, fund raising, significant stock...
Manufacturer Sales Pitches Revealed on Dec 02, 2014
IPVM sent a 'secret shopper' to ISC East 2014 to talk to manufacturer sales reps at their booths. We wanted to understand and contrast how they...
Comments (42): PRO Members only. Login. or Join.

Related Reports

March Networks Company Profile on Jul 17, 2017
March Networks was one of the most well-known video surveillance manufacturers of the 2000s. In 2012, March was acquired by Chinese / American...
Hikvision Distributor Says Hikvision "Top Rated Yet Most Hated" on Jul 12, 2017
The CEO of 2M Solutions, a distributor selling Hikvision cameras under their own as well as Hikvision's brand has publicly declared Hikvision to be...
Best Manufacturer Perks on Jul 07, 2017
A decade ago, the best manufacturer perk was likely a trip on the Pelco jet: But the Pelco jet is long, long, long gone. What types of perks...
Hikvision USA Hires VP of Business Development on Jul 05, 2017
Hikvision USA is expanding again, this time in its drive to move up market to larger integrators and end users. In this note, we analyze...
IndigoVision Raids Avigilon Sales Team on Jul 05, 2017
If you can't beat 'em, hire their employees? This could be described as IndigoVision's most recent strategy to increase market share in North...
Hikvision Hits Record 'ALL PRODUCTS' Sales Run on Jun 30, 2017
Hikvision has a new record. This one is for the most times a video surveillance manufacturer has put all their products on sale in 2 months....
Hikvision Stock Surges - Doubling In Past Year on Jun 29, 2017
Hikvision's stock, on the China Shenzhen stock exchange, has more than doubled in the past year, vaulting the company's worth to an astounding (for...
Resolver Raises $20M For Acquisitions on Jun 29, 2017
Resolver has closed a $20M funding round, and has several acquisition targets lined up already. Industry people might better now Resolver from PPM...
Top 5 Improvements For Manufacturer Sales People on Jun 28, 2017
Manufacturer sales people are very important to integrators, but it takes more than just punching a clock to be successful and truly valuable to...
Manufacturer Sales People Are Very Important - Statistics on Jun 26, 2017
IPVM's new integrator statistics show what sales people say regularly: Sales people are very important. From 150 integrator...

Most Recent Industry Reports

Competing Against ADT on Jul 20, 2017
ADT is one of the biggest players in the security industry, with ~$4 billion revenue. In 2017, they were acquired / merged with Protection...
Hikvision Launching Deep Learning Recorders on Jul 20, 2017
Hikvision has become a common choice for super low cost NVRs. Now, Hikvision is aiming to move up market, with deep learning NVRs that claim far...
PR Campaign Exploiting Manufacturer Cybersecurity on Jul 20, 2017
Manufacturers increasingly have a bulls-eye on their back. As cyber security solutions providers grow, they realize a great way to get publicity...
Axis Door Station Tested (A8105-E) on Jul 19, 2017
Axis continues their push into niche markets, especially audio, with network speakers, an IP horn, and video door stations. We bought and tested...
Manufacturer Favorability Guide on Jul 19, 2017
This 120 page PDF guide may be downloaded inside by all IPVM members. It covers our 20 manufacturer favorability rankings and 20 manufacturer...
$8 Billion Utility Georgia Power Enters Surveillance Business Offering Avigilon And Genetec on Jul 19, 2017
Utilities are typically considered major customers of surveillance integrators but one utility, Georgia Power, with $8+ billion in annual revenue...
Knightscope Laughs off Robot Drowning on Jul 18, 2017
A day after a Knightscope robot drowned, Knightscope has issued an 'official statement' making fun of the issue: The implied message is that...
Microsoft Video AI Cloud Services Examined on Jul 18, 2017
Microsoft has released one of the most amazing video analytics marketing videos ever. In it, they detect oil spills, track individual people giving...
Hikvision USA Head of Cybersecurity Exits on Jul 18, 2017
Hikvision USA's Head of Cybersecurity has exited the company. In this note, we review the move, share Hikvision's feedback and examine the...
'Suicidal' Knightscope Robot Drowns on Jul 17, 2017
Knightscope continues its hyper growth, at least when it comes to controversy, this time with a 'suicidal' robot in Washington DC. And here is...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact