Valley Cred: Samsung Plans to Open New Start-Up Accelerator in Downtown Palo Alto
While it is one of the largest consumer electronics and mobile companies in the world, Korean's Samsung has a relatively quiet profile in Silicon Valley. — In fact, while it has had a longtime facility …
Context & Ripple Effects
Samsung arrives at this accelerator announcement from a position of commercial strength but reputational thinness in Silicon Valley: the company has long kept a low profile there despite a longtime local facility, even as its device business peaks — the Galaxy Note II passed 5 million channel sales in November 2012 and the Galaxy S III Mini quietly went on sale unlocked at Amazon.
The move lands mid-fight with Apple, after a federal judge ruled on November 15, 2012 that Samsung could add the iPhone 5 to its patent-infringement claims, and alongside its push into mass-producing plastic-based flexible displays. It also follows a September labor group's allegations of overwork and denied labor rights at Samsung's Chinese factories, which the company has confirmed it is taking measures to address — making goodwill in the Valley's startup ecosystem a useful complement to a litigious, scrutinized moment.
First-order effects
- Early-stage startups gain a new deep-pocketed backer in downtown Palo Alto, with Samsung getting first look at mobile and consumer-software deal flow from inside the ecosystem it has mostly watched from the sidelines.
- Samsung's Silicon Valley profile shifts from quiet tenant to active participant, giving its executives a standing presence among founders at the exact moment it is escalating claims against Apple in court.
Second-order effects
- The accelerator gives Samsung a soft-power channel with developers and founders that operates independently of its patent war with Apple, letting it court the ecosystem even as the litigation hardens positions.
- Corporate-backed accelerators become another competitive front among large hardware and mobile players, which now bid for the same early-stage pipeline through programs rather than acquisitions alone.
Third-order effects
- If the pattern holds, global consumer-electronics giants increasingly institutionalize Silicon Valley outposts — accelerators, investment arms, expanded offices — to buy innovation access and local legitimacy rather than relying on internal R&D in home markets.
- Startup accelerators attached to corporates edge toward becoming standard infrastructure for how large foreign firms enter and signal commitment to the US software ecosystem, reshaping who founders take early money from.
The trend: The world's largest device makers are purchasing Silicon Valley credibility and deal flow through startup programs, turning accelerators into a standard instrument of corporate strategy for hardware giants.