Is Samsung (SSNLF) Working On A Bixby-Powered AI Speaker?

Citing sources familiar with the matter, The Wall Street Journal (WSJ) reported that South Korean tech giant, Samsung Electronics (KS:005930) Co Ltd. (SSNLF) is working on a Bixby-powered artificial intelligence (AI) speaker, codenamed Project Vega. The details of the product and launch timings aren’t clear as of now. Moreover, Samsung has refrained from commenting on the matter.

Per WSJ, Vega is in the works since last one year. The project has been marred by delay in launch of the English version of its digital voice assistant, Bixby, the report added.

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

A few days back, Samsung’s arch rival in the smartphone space, Apple Inc (NASDAQ:AAPL) , unveiled the Siri-integrated HomePod. With the device, Apple is preparing itself to take on Amazon’s (NASDAQ:AMZN) Echo and Alphabet’s Google (NASDAQ:GOOGL) Home.

Samsung’s entry in the field will be highly difficult against established players like Echo and Google Home. Moreover, the launch of 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 in 2017.

Samsung Electronics Co. Price

Samsung Electronics Co. Price | Samsung Electronics Co. Quote

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.

In a separate development, Reuters reported that Samsung has said that it will invest about $18.6 billion in South Korea to “extend its lead in memory chips and next-generation displays for smartphones.” Samsung will be allocating a chunk of this investment toward its new NAND factory in Pyeongtaek and also invest in the new semiconductor production facility in Hwaseong. The company is also looking to create about 440K domestic jobs by 2021.

Also, per a Thomson Reuters survey, Samsung is expected to report a 67% jump in its operating profit to $11.4 billion for the April-June quarter, buoyed by sale of memory chips as well as solid sales of S8. Year to date, shares of Samsung have widely outperformed the Zacks categorized Electronic products Miscellaneous Products industry. While the industry gained 12.5%, Samsung shares have surged 60%.

Stocks to Consider

Stocks worth considering in the broader tech space include Quantum Corporation (NYSE:QTM) and Marvell Technology Group Ltd. (NASDAQ:MRVL) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Quantum and Marvell have delivered average positive earnings surprise of 43.75% and 86.70%, respectively in the trailing four quarters.

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