Is Samsung Scraping Its Bixby-Powered Speakers Project?

Per latest reports, South Korean tech giant, Samsung Electronics (KS:005930) is apparently thinking of shelving its Bixby-powered artificial intelligence (AI) speakers project. The report surfaces less than a month after it was speculated that the company is working on the project, codenamed Project Vega.

The Korea Herald, citing sources familiar with the matter, reported that Samsung might be rolling back Vega given the stiffening competition in the space. Quoting the source, it added “Samsung currently does not view Al speakers as marketable, as the global market is already dominated by unbeatable Amazon and the Korean market is too small to make profits.”

Vega, which was reportedly in the works since last year, was marred by the delay in launch of the English version of its digital voice assistant. After multiple delays, Samsung finally rolled out the English-speaking Bixby on Galaxy S8 in the U.S.

The company unveiled Bixby in March this year along with the Galaxy S8 and S8+ phones. It stated "Bixby is at the heart of our software and services evolution as a company."

Ever since initial reports surfaced about Vega, analysts have been skeptical of Samsung’s entry in the field as it would be highly difficult to compete against established players like Amazon’s (NASDAQ:AMZN) Echo and Alphabet’s (NASDAQ:GOOGL) Google Home. Moreover, the launch of Apple’s (NASDAQ:AAPL) HomePod this December will also add to its woes.

Per a recent report from eMarketer, Echo is the most popular voice-controlled speaker so far and is expected to maintain its supremacy through 2017.

The report stated that the number of Americans using home assistants is expected to more than double this year. It added that Amazon will have above 70% of the total voice-enabled speaker users in the U.S. this year. Meanwhile, Google Home is expected to account for 23.8%, while other smaller players like Lenovo, LG, Harmon Kardon and Mattel (NASDAQ:MAT) would account for only 5.6% of the total users.

Year to date, shares of Samsung have surged 85.6%, widely outperforming the industry’s rally of 14.3%.

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