Samsung is making an aggressive push into the connected car space.
Samsung has announced that it is acquiring car audio maker Harman for $8 billion. The brand is best known for its consumer audio products sold under the Harman Kardon label, but Samsung is more interested in the Harman’s automotive sales, which accounted for 65% of the company’s overall revenue.
Harman’s connected car solutions – including audio, embedded infotainment, telematics, connected safety and security systems – are estimated to be installed in over 30 million vehicles globally.
From Samsung Electronics vice-chairman and CEO Oh-Hyun Kwon:
HARMAN perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time.
As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognized portfolio of best-in-class products, HARMAN immediately establishes a strong foundation for Samsung to grow our automotive platform.
Samsung says that its expertise in “mobility, semiconductors, user experience, displays” and global distribution channels combined with Harman’s “long-term relationships” with leading car makers will allow the combined business to “create significant growth opportunities.”
In addition to the automotive segment, Samsung will tap into Harman’s advances in the IoT space in rolling out the “next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data and devices.”
Samsung is also looking to leverage Harman’s audio brands – which include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel – to “deliver enhanced customer benefits and elevate user experiences across Samsung’s complete portfolio of consumer and professional products and systems.”
With the mobile segment getting saturated, manufacturers are looking to the connected car industry to drive future growth. Following the acquisition, Harman will operate as a standalone Samsung subsidiary, with current CEO Dinesh Paliwal set to remain at the helm. The deal will close by mid-2017.