Samsung Buying Automobile Accessory Company Harman for $8 Billion

Samsung Electronics has announced that it will spend $8 billion to purchase Harman International Industries Inc, a company which designs and manufactures connected automobile infotainment systems. The buyout of Harman is Samsung's "largest ever overseas acquisition" and sets up the company to become the "go-to supplier" for automobile accessories and systems (via Bloomberg).

Harman's customers, including BMW, Volkswagen, and General Motors Co., will now become clients of Samsung following the acquisition, placing the South Korean company in the "top ranks of auto technology suppliers." Harman is a major home audio company as well, with products under brands like JBL, Infinity, Harman/Kardon, and more.

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The announcement comes a few days after Jay Y. Lee officially became the vice chairman on Samsung's board. According to analyst Park Kang-ho, the acquisition is the first of many moves that solidifies Samsung's "life after smartphones," which Kang-ho believes to be electric vehicles.

“This is the first deal cut after Jay Y. joined the board and shows his management style is different from his father. He is an aggressive deal maker,” said Park Kang-ho, an analyst with Daishin Securities Co. “In the longer term, Samsung is thinking that life after smartphones is electric vehicles.”

Samsung previously purchased a stake in Chinese electric-car maker BYD Co., but its automotive aspirations appear to momentarily focus solely on continuing its history as a components manufacturer, rather than entering the market with its own vehicle. With Harman, Samsung could produce new products for internet-connected cars with attention focused on navigation, multimedia entertainment, security systems and analytics tools.

“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,” Vice Chairman Kwon Oh-hyun said in the statement. “Harman immediately establishes a strong foundation for Samsung to grow our automotive platform.”

Besides expanding the scope of Samsung's future, the Harman acquisition could also help the company find its "next leg of growth" and move away from a reliance on smartphone sales, made worse this year by the Galaxy Note 7 recall. In total, market research firm IDC estimated that Samsung shipped 72.5 million smartphones in Q3 2016, which was down 13.5% compared to the estimated 83.8 million smartphones it shipped in the same quarter in 2015.

Tag: Samsung

Top Rated Comments

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Keniutek

37 months ago

Better than buying Beats...
:P

Rating: 12 Votes

Opieap13

37 months ago

Samsungs phones are the bomb. Samsungs washers are explosive.
Now wait till you get a Samsung car they are to die for

Rating: 7 Votes

gmcalpin

37 months ago

I see no Harman this acquisition!

Rating: 7 Votes

enthusiastic

37 months ago

Playing window blasting music takes on a whole new meaning now.

Rating: 4 Votes

H2SO4

37 months ago

I guess Ill have to hurry up and buy Infinity home theatre speakers before the merger is complete and samsung turns the brand to crap

Yeah, like they did with the processors they sell to Apple right?

Rating: 3 Votes

blacktape242

37 months ago

I see no Harman this acquisition!

Rating: 3 Votes

Mac Fly (film)

37 months ago

Next up sTunes, sMusic, Samsung buys Sennheiser for $3B and then releases their own muckOS for their own line of vertically integrated desktop and notebook computers.

Rating: 3 Votes

69Mustang

37 months ago

No, we don't know what effect this may have on CarPlay. Maybe Apple has been trying hard to get car companies to offer CarPlay as an option. I know Ford/GM either do or soon will, but Toyota first announced that they would offer it as an option but later backed out. I don't know about other Japanese automakers. But there hasn't been much news about CarPlay in the last few years, other than a Bluetooth version finally being released sometime last year. I haven't heard anything about new automakers signing on or Apple (or anyone else for that matter) hyping the fact that it's available as a dealer option for X brand of car.

With Apples tendencies toward secrecy, MOST commentators don't know what Apples current focus is. I don't see a lot of reputable car sites speculating that Apple is going to do X or is signing company Y. So my guess is that this is another facet of Apples operations that isn't getting a lot of emphasis. I don't know this for a fact, but I don't see any reason to believe otherwise either. A car entertainment system makes sense for Apple, or at least it could. To me it looks like Apple started to invest in the concept but for some reason stopped. Uncooperative auto companies, car stereo companies not wanting to help Apple, or other reasons, it really doesn't matter. Given enough time SOME company is going to become dominant. I'm just not confident that Apple is even trying right now.

Dude. You're all over the place with your comment. Samsung buying Harman has nothing to do with, and has no effect on CarPlay or Android Auto integration. The determination of inclusion/exclusion is the car manufacturers decision. Full stop. Neither Harman before, nor Samsung now, have any say so on that decision. CarPlay is safe.

The vast majority of automotive infotainment systems use QNX as their backbone. It's ubiquitous, relatively inexpensive, and it's a known entity that car companies can control. They build and control their own vision of infotainment on that QNX backbone. Giving up that control to Apple, Samsung, Google, or any other company ain't gonna happen.

Rating: 3 Votes

69Mustang

37 months ago

The possible effect on CarPlay was the first thing that I thought of when hearing this as well. I wish Apple had concentrated on car/mobile entertainment systems (and getting auto makers to offer Apples ) rather than whatever the Apple Car project was/is/ends up being.

There's no effect on CarPlay. That's not how this works.

Rating: 3 Votes

ArtOfWarfare

37 months ago

I wonder what this will do to CarPlay...

Will Samsung allow their infotainment systems to support CarPlay? If they choose to not support it, will BMW, VW, and GM choose to pivot to other infotainment system suppliers that do support CarPlay, or will they stick with systems that don't support CarPlay?

Rating: 2 Votes

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