Samsung bets $8 billion on connected cars with Harman acquisition

It looks like the Note7 debacle didn’t exhaust all of Samsung’s spare cash as it is dropping eight big ones on the connected car and audio market.

Harman is probably best known for speakers and headphones, or as the company insists on referring to them ‘lifestyle audio solutions’. But, according to Samsung, two thirds of its $7 billion sales last year were automotive-related, which would include speakers but also infotainment systems, telematics, etc.

The Harman press release ticks all the corporate-speak boxes by saying the move ‘Creates end-to-end solutions powerhouse’, once you factor in all the things Samsung is good at. Buzzwords aside it’s hard to argue with the claim and Samsung/Harman is in a strong position to supply much of the infotainment hardware required by tomorrow’s connected car.

“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,” said 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.  Working together, we are confident that Harman can become a new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.”

“Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers,” said Dinesh Paliwal, Harman Chairman, President and CEO. “Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace.”

When the deal goes through some time next year Harman will remain a standalone Samsung subsidiary run by Paliwal, indicating Samsung will keep Harman as its connected car brand. The same may apply to other connected audio devices and it wouldn’t be surprising to see Samsung go after the AI-driven domestic speaker market too.