Samsung Electronics has bought Harman who make visual screen and navigation systems for cars. The deal was worth $8bn and was announced last November.
Why? The answer lies in this quote from an Apple executive: “The car is the ultimate mobile device”. Despite Apple and Samsung being firm competitors, this quote rings true in this case.
Harman, based in Connecticut, makes internet connected audio information and security equipment for those big mobile devices called cars. A while back I wrote about Harman working with Lotus to provide sound systems for electric cars such that the driver hears an engine sound – and one that the driver chooses. Their domain is connecting “chip-enabled” devices such as a mobile phone to systems built into a vehicle which allows the phone to deliver content or internet sourced data to the vehicle.
It is a business with around $7bn of revenue with most of that coming from the automotive industry. Estimates suggest that over 30m cars already use some of their technology and this number is rising as more new vehicles leave the dealership networks.
Clearly this is a sector that interests Samsung Electronics, part of the huge Samsung chaebol (or family group). This group includes Samsung SDI who make lithium batteries for electric cars and did include Samsung Motors (now controlled by Renault). Samsung also partnered with Leo Burnett to develop the see through truck.
This is one of Samsung’s biggest acquisitions over the years and this suggests that they are looking at the automotive sector as the next big thing. Many readers will know that Samsung had a massive PR failure with a new mobile phone late last year when the phones overheated to the point of combustion – a possible by-product of overloading the chips.
Samsung Electronics has already invested in startups that develop automotive software for connected cars and Harman will add not only software development teams but also a massive global network of car manufacturers all clamouring for new technology – I wrote another article on that subject a few weeks ago. One of their plans is to build a “solution” with hardware and software specific to a function for a vehicle. Remember, Samsung Electronics has the mobile phone division that is a direct competitor to Apple and if they can develop a bolt on or replacement device that shares data with the owner’s mobile phone, they have a huge market to go after.
Remember also that Samsung mobile phones use the Google Android operating system and Google themselves are developing a driverless car. Could their relationship dramatically improve the Google vehicle with new functions or crowd-sourced data points through a mobile network?
This is an interesting play by Samsung and one that could mean that every new car, bus or truck has some of their technology fitted as standard – it doesn’t matter what the vehicle is: petrol/diesel, hybrid, electric, hydrogen, driverless, you name it, the technology will be vehicle agnostic.