MarketLine Blog

Samsung purchase of Harman signals the future

The takeover of Harman has placed Samsung among the leading players in the connected car industry; the Korean technology company has access to a raft of deals with major car manufacturers, expertise from a range of companies acquired by Harman and a huge $24bn order backlog. Infotainment, acoustics, display and other systems are all due to expand in value in the coming years, and Harman has systems already installed in over 30 million cars worldwide. Taking over the company presents Samsung with a highly valuable market position.

CarPlay (the system introduced by Apple) is utilized by many leading car manufacturers and already has a substantial consumer following; the takeover of Harman provides the opportunity for Samsung to target CarPlay through the ‘Car Play for Galaxy’ system. The extensive range of audio and in-car technology companies under the stewardship of Harman will allow Samsung to integrate existing products into those produced by Harman. Just through the purchase of one company Samsung has become a leading player in a major growth market.

A proposed deal to takeover some or all of Italian electronics company Magneti Marelli (presently under the ownership of Fiat Chrysler) has failed to materialize and the lack of news emanating from the negotiations raises concerns as to the prospects of an arrangement ever being reached. The purchase of Harman, therefore, provides Samsung with an alternative point of access into the connected car market. Whilst the opportunity to become involved in a company currently working with Google on driverless cars appears to be on the wane, Harman presents extensive opportunities. Samsung is taking over a lot more than one company.

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