Samsung looks for a stronger presence in the connected car industry, including vehicle telematics.
Samsung is moving forward with its vision for connected cars by acquiring Harman International Industries, a global provider of connected car technology, analytics, and cloud services. The deal, announced on Nov. 14, was closed for $112 cash per share, for a total of about $8 billion.
The acquisition will give Samsung an increased presence in the connected car industry, which is expected to grow to over $100 billion in the next decade, the company stated. Harman has more than 30 million vehicles currently equipped with their connected car and audio systems which include telematics, embedded infotainment, and connected safety.
Related: A global market for telematics in auto insurance
Approximately 65 percent of Harman’s $7 billion of reported sales during the 12 months ending Sept. 30, 2016 were automotive-related, and its order backlog for this market as of June 2016 was approximately $24 billion.
“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,” stated Young Sohn, president and chief strategy officer of Samsung Electronics. “We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow.”
Sohn said that Harman can become a “new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.”
The deal is expected to strengthen Samsung’s brand in several key areas, the announcement stated, including:
Automotive: Harman’s connected car technologies will be combined with Samsung’s technologies such as 5G, as well as UX/UI, display technology and security solutions to provide significant benefits to automakers who are building the next generation of connected cars.
Audio: Harman’s leading brands and audio systems include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel. The company also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive. The company believes they will strengthen the competiveness of their mobile, wearable and virtual reality products.
Professional: The acquisition will also expand their business platform and enable them to deliver large-scale audio and visual solutions to stadiums and concert venues.
Connected Services: Samsung will gain access to Harman’s engineering and developer talent which they say they hope will enable them to deliver the next generation of IoT and cloud-based services for connected cars.
The deal is expected to close in Q2 of 2017, pending shareholder approval.
