The South Korean electronics giants, Samsung Electronics have made their greatest deal ever. They have decided to purchase Harman, an auto-tech manufacturer based in US, for $8 billion. This is their best ever attempt to expand their business beyond household technology.
This is the largest ever foreign achievement for Samsung Electronics. With the collaboration of Harman International Industries Inc , they would become the go-to supplier of all type of technology. It all happened after heir-apparent of Samsung Group Jay Y. Lee confronted the board of electronic firms. In a formal meeting he presented his plan to show his inspiration in the family-run corporation.
Samsung beyond electronics
With future cars being designed with features of a smartphone, they are providing a huge opportunity to the tech companies. They can now get the best tech to tempt their passengers with in-car technology. Samsung is trying to get in the advance market by joining alliance with a popular automotive tech supplier. A recent study by PricewaterhouseCoopers described the market that could generate $7.8 trillion of revenue by 2030.
A person having information about the scenario said:
“Samsung doesn’t plan to make cars itself, but sees automotive technology, and the broader shift toward connected, driverless vehicles, as a promising growth area to sell more of its semiconductors, display panels and mobile services”
Head of Samsung Electronics, Young Sohn stated:
“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”
Harman is famous for its Harmon-Kardan sound system. But it is no longer an audio device manufacturing company. It is running a widely spread car business dealing in car products. Besides the attainment offer from Samsung, its first priority is to acquire and expand its business. In a recent deal last year, Harman acquired a software service company known as Symphony Teleca based in California, for $780 million.
The company sells technology that manufactures systems which enable cars to wirelessly update their firmware according to the requirement of the driver. Additionally, these products are minors of the company’s products.
Car related technology is also growing day by day with tech companies like Google, Uber, Tesla and even Apple jumping up in the auto industry. This could prove to be a huge change in auto industry with connectivity and smartness being the new key to the market.
However, it should be duly noted that this is not the first time that Samsung has tried to raid into the automotive business. In collaboration with Nissan, it also produced Samsung Motors as a subsidiary in the 1990s and built a mass-market car. Apparently, the company sold most of its share to Renault due to a financial crisis in Asia.
With the acquirement of Harman, Samsung is determined to expand its business in automotive industry as well as sound system technology. It is expected that the deal would be closed by the mid of 2017.