Samsung encroaching on Apple’s turf

Samsung Electronics is preparing to establish a start-up incubating facility in Silicon Valley - a move aimed at boosting its entrepreneurship alongside global innovators in the neighborhood.

According to a Monday report from AllThingsD, a tech Web site run by Dow Jones & Company, the world’s No. 1 smartphone maker is close to signing a deal on a venue in downtown Palo Alto, California, to accommodate a start-up accelerator - in the vicinity of its archrival Apple.

Samsung announced in September it is scheduled to complete two six-story buildings to serve as a U.S. research and development center on an 8.5-acre campus in Mountain View. Construction starts next year and completion is slated for 2014. Samsung Information Systems America, its U.S. R&D Center, will also expand and relocate to the new campus.

The news follows Samsung’s signing of an MOU with the state of California in August to step up its investment in research and development. In return, the federal government promised to provide tax exemptions and employee training programs.

“While it is unclear if the new office will focus on making investments in start-ups or incubating its own innovation, sources said it will be aimed at linking Silicon Valley entrepreneurs and other players more closely with Samsung,” the report said. “It’s not quite ‘Oppa Gangnam Style,’ but it is a big move for Samsung,” it added, referring to rapper Psy’s global hit song.

Citing unidentified sources, it said the start-up accelerator represents a “new push to create more media offerings” and will be spearheaded by David Eun, who has served as executive vice president of Samsung’s global media group since December last year. He was designated to enhance software capabilities in areas such as smart TVs and home appliances.

A Harvard Law School graduate, Eun previously served as president of AOL Media and Studios and was responsible for global business development efforts in video, print and local content businesses as vice president of content partnership at Google.

Regarding the AllThingsD report, a Samsung spokesman said the company is “currently looking into whether it is true.” “Rumors are swirling over Samsung investing in Silicon Valley but it’s our rule not to respond,” he said.

Already a No. 1 producer of smartphones, TVs and computer memory chips, Samsung - to sustain its growth and overtake rivals such as Apple and Google - needs to beef up its software competitiveness, many experts have pointed out.

Unlike Apple and Google, which have already customized their own software ecosystems with iOS and Android, Samsung has yet to reach a comparable stage. However, it has come up with Bada, a self-developed operating system with a market share of 3 percent globally.

“The mobile revolution is evolving from smart TVs to cloud systems and big data,” said Song Jong-ho, an analyst with Daewoo Securities. “Competitiveness in software development is a prerequisite for Samsung to achieve this.”

Forbes magazine in late September even proposed that Samsung acquire mobile content providers - video streaming service provider Netflix, game developer Electronic Arts and Web properties investigator IAC/InterActiveCorp - to compete more effectively against Apple, Google and Amazon.

By Seo Ji-eun [spring@joongang.co.kr]