Samsung buys Harman for $8bn as a foot in the door of connected car market
SAMSUNG Electronics hopes to take advantage of the rapidly growing connected technologies sector by purchasing Harman International Industries for US$8 billion, the South Korean-based company confirmed.
The acquisition is the biggest overseas purchase made by Samsung.
U.S.-based Harman International Industries specializes in connected technologies, particularly for automotive electronics, which falls under the Internet of Things umbrella.
There are more than 30 million vehicles currently equipped with Harman’s connected car and audio systems, including embedded infotainment, telematics, connected safety and security.
Samsung says the acquisition will give the company a significant presence in the large and rapidly growing market for connected technologies, a sector that Samsung believes will grow to more than US$100 billion by 2025.
Research firm Gartner forecast that by 2020 one in five vehicles will have some sort of wireless network connection.
Connected cars are also key to driverless car technology, which is expected to reach commercialization by 2020.
Samsung to acquire Harman for $8 billion to boost its automotive tech business https://t.co/sCZ4GcMEhg
— TechCrunch (@TechCrunch) November 14, 2016
“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,” said Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics.
Approximately 65 percent of Harman’s US$7 billion of reported sales during the 12 months to September 2016 were automotive-related, and its order backlog for this market in June 2016 was approximately US$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,” added 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.”