With the launch of ThinQ ON, LG Electronics signaled the start of phase three of its artificial intelligence (AI) home strategy. As a result, the center of the AI home "hub" (control tower) that integrates and manages home appliances and Internet of Things (IoT) devices in the home has shifted from smartphones to speakers. Since exiting the smartphone business in 2021, LG Electronics has faced criticism that "customer accessibility" has declined in terms of connectivity, which is core to the AI home.
According to LG Electronics on the 13th, ThinQ ON, released last month, is the product that marks the start of building a "determinative" (phase three) AI home that analyzes life data to identify user needs and provide solutions. The company has sequentially developed the AI home as follows: ▲ "responsive" (phase one), in which devices understand the user's language and control appliances and spaces through conversation; ▲ "context-aware" (phase two), in which AI learns the user's situation and executes necessary actions first.
The speaker-shaped ThinQ ON is equipped with Generative AI, allowing it to converse with users in everyday language. Based on this, it controls connected home appliances and IoT devices in the home. It can understand context through everyday conversations with users and learn and predict lifestyles. It is differentiated from existing AI speakers, which are limited to simple short answers and fixed commands. An LG Electronics official said, "It constantly monitors the home environment and appliances/devices, then converses with customers in everyday language to assess situations and control various devices to their optimal state."
LG Electronics said ThinQ ON serves as an "AI home hub." The approach has shifted from controlling AI appliances and IoT devices through a smartphone app to "providing space solutions through conversation" using a speaker. Until 2023, LG Electronics expanded its ecosystem by designating the appliance and IoT control application (app) ThinQ as the "AI home hub," adding features such as linking with third-party products and offering customer-tailored upgrades. Some in the home appliance industry interpret LG Electronics' change in AI home hub as "an attempt to break through the limitations of customer accessibility based on a smartphone app."
◇ From smartphone to speaker… Why the AI home control tower is being reset
According to Mobile Index by big data analytics company IGAworks, the monthly active users (MAU) of LG Electronics' ThinQ app as of October totaled 2,313,745. The number fell for three consecutive months from July (2,819,078), with about 500,000 users dropping in Korea alone. Even as the number of AI-connected appliances is gradually increasing, app usage has decreased.
Compared with the same month a year earlier (1,754,464), the number of ThinQ app users rose about 31.9%, but it did not achieve a large increase compared with rivals. During the same period, the user count for the Heyhome app operated by Gokal (640,417 as of October) grew 39.1%, and the Google Home app (597,700 as of October) rose 37.0%.
In the third quarter, LG Electronics' home appliance business (including HVAC) posted sales of 8.7476 trillion won, about 2 trillion won more than rival Samsung Electronics (6.6250 trillion won). However, the ThinQ app's user count is roughly 4.5 times smaller than Samsung Electronics' SmartThings app (10,292,447), which offers similar functions.
A home appliance industry official said, "The aftermath of exiting the smartphone business is affecting the home appliance business as well," adding, "LG Electronics' AI home strategy differs from Samsung Electronics, which can boost accessibility through Galaxy (Samsung Electronics' smartphone brand) users, and is also differentiated from software-centric platform corporations in that it has its own home appliance ecosystem."
◇ Strengthening "connectivity" through the Athom acquisition… Outfitted with OpenAI's "brain"
LG Electronics' shift in AI home hub took shape after it acquired an 80% equity stake in the smart home platform company Athom in July last year. Athom's smart home solution Homey is compatible with about 50,000 types of appliances and IoT devices. It also supports a variety of connection methods, including wi-fi, Bluetooth, Z-Wave, Matter, and Thread, providing high scalability. ThinQ ON incorporates Athom's open ecosystem. At the time of the Athom acquisition, Jeong Ki-hyeon, executive vice president and head of the Platform Business Center at LG Electronics, said, "The Athom acquisition is the cornerstone of the AI home business," and "We will expand external integration services based on an open ecosystem and connectivity, and provide customers with diverse and multidimensional spatial experiences through synergies with AI appliances."
LG Electronics also sought differentiation by applying the AI agent "Furon," developed based on GPT-4o, a large language model (LLM) from OpenAI, the developer of ChatGPT, to ThinQ ON. A portmanteau of Future and Neuron, Furon carries the meaning of connecting customers' everyday experiences, spaces, and future, like a neural network. By securing core technology that serves as the "brain" of the AI home, the company has effectively built a new speaker-centered connectivity ecosystem.
LG Electronics also improved service convenience by linking with various apps such as calendar, transportation, and shopping. It can implement services such as checking schedules through a calendar app and calling a taxi at the appointment time. An LG Electronics official said, "Based on AI technology, ThinQ ON can assess situations and, for example, ask whether a dryer has finished running, and set other appliances to power off or enter power-saving mode in line with sleep mode."
LG Electronics released ThinQ ON at 246,000 won and launched various IoT devices ranging from 40,000 won to 513,000 won alongside it. If an appliance connects via wi-fi or remote control, it can be combined with ThinQ ON and included in the AI home ecosystem. For example, connecting a presence sensor to an air conditioner without AI functions allows it to detect the user's location and adjust airflow and direction.
The AI home market, into which LG Electronics declared entry into phase three, is growing rapidly. According to market research firm InsightAce Analytics, the global AI-based smart home market was estimated at $15.3 billion (about 22.4145 trillion won) last year. It is forecast to grow at an average annual rate of 21.3% from this year to reach $104.1 billion (about 152.5065 trillion won) in 2034. After establishing the phase three strategy for the AI home, LG Electronics is pursuing a strategy to secure future growth by evolving to an "autonomous" (phase four) model in which AI independently judges and integrates the management of multiple devices and services without user commands.