Updated! Proving again that the car will be a major hotbed for future consumer electronics, Samsung said Monday, it plans to purchase Harman for $8 billion.
Harman, maker of JBL and Infinity aftermarket car audio products, is a leading OEM supplier to the car companies, claiming OEM orders of $24 billion in the pipeline.
It’s appeal to Samsung is its expertise in the “connected car,” which links the car’s infotainment system to navigation, and other networks.
The purchase of Harman is Samsung’s biggest acquisition in its history.
Samsung said the deal combines Samsung’s expertise in cellphones and semiconductors and its global distribution with Harman’s expertise in in-car electronics and its relationships with the car companies as well as its audio capabilities and brand recognition.
“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,” Young Sohn, the president and chief strategy officer of Samsung Electronics, said in a news release.
We asked Harman how the deal will affect its aftermarket business, but did not receive an immediate response.
However Samsung said Harman “will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and Harman’s current management team. Samsung is pursuing a long-term growth strategy in automotive electronics, and plans to retain Harman’s work force, headquarters and facilities, as well as all of its consumer and professional audio brands.”
The deal also gives Samsung access to Harman’s 8,000 software designers and engineers who are working on the Internet of Things. This includes the next generation of cloud-based consumer and business services for the car.
Last month, rumors circulated that Samsung wanted to purchase Focal.
Update– Research firm IHS said, “The combination of Samsung and Harman in terms of its benefits for each in automotive technology is a no brainer. Samsung has tremendous scale when it comes to procurement, allowing it to bring efficiencies to the supply line when it comes to Harman’s products.”
IHS added, “Harman is a market leader when it comes to automotive services such as cybersecurity, over-the-air updates, analytics, cloud services and apps integration, all of which are growth white spaces in automotive.”