Samsung is to outlay US$8 billion to acquire the HARMAN group – a vast range of products and brands covering audio, automotive, professional AV, and connected services.
HARMAN will continue to operate as a standalone subsidiary led by Dinesh Paliwal, HARMAN’s Chairman, President, and CEO and its current management team. The move will see Samsung’s Automotive Electronics Business Team established in December 2105 join the group.
It will immediately give Samsung a Tier 1 presence in the large and rapidly growing market for connected technologies, particularly automotive electronics, which has been a strategic priority for Samsung. HARMAN is the market leader in connected car solutions, with more than 30 million vehicles currently equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety, and security. Approximately 65% of HARMAN’s $7.0 billion sales during the 12 months ended September 30, 2016, are automotive-related.
But there are some venerable brands in its stable and these will continue under Samsung.
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Samsung expects the combination to deliver significant growth opportunities and benefits to customers by leveraging Samsung’s and HARMAN’s complementary technologies, resulting in increased market penetration across important end markets.
- Audio: HARMAN’s leading brands and cutting-edge 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. These brands will greatly enhance the competitiveness of Samsung’s mobile, display, virtual reality and wearable products to deliver a fully differentiated audio and visual experience for customers.
- Professional: The combination will also expand the combined company’s business-to-business platform through its ability to deliver integrated, large-scale audio and professional visual solutions at stadiums, concert facilities and such as The John F. Kennedy Centre for the Performing Arts and STAPLES Centre – home of the GRAMMY Awards.
- Connected Services: Samsung will gain access to HARMAN’s 8,000 software designers and engineers who are unlocking the potential of the IoT market. This collaboration will deliver the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data, and devices.
- Automotive: Combining HARMAN’s leadership in new connected car technologies, including its top positions in infotainment, cyber security, over-the-air updates and telematics, with Samsung’s significant expertise and experience in connectivity technologies, including 5G, UX/UI, display technology and security solutions, will enhance HARMAN’s automotive and connected services businesses to drive greater sales and provide significant benefits as automakers speed the adoption of next-generation connected cars.
“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.”
HARMAN also holds 6300 patents and patents pending, revived 56 design awards in 2015 and 3 Grammy Awards for AKG, JBL, and Lexicon. It has 30,000 staff in 25 countries, and half of these are engineers and R&D specialists.
