Samsung looks to enter car electronics market with purchase of Harman

With its purchase of the electronics group Harman, Samsung is taking a big step into the automotive sector. 

The South Korean manufacturer, the world’s leading producer of smartphones, has agreed to buy the US electronics company for a total of about US$8bil (RM31.94bil). 

Roughly two-thirds of Harman’s business comes from car electronics, notably the company’s factory-installed entertainment systems used by several carmakers. 

At the same time, Harman has been working on integrating car features and security systems. At last year’s CES trade fair, Harman unveiled a camera system that can recognise the driver’s stress levels. 

With the Harman purchase, Samsung will be getting a close, direct link to leading car manufacturers, as well as clear insights into carmakers’ visions of the future and their customers’ wishes. 

As a result, competition among car electronics producers could be heating up once again, with carmakers tending to rely on their own in-house solutions, while Apple and Google each hope to gain centre stage with their platforms Carplay (for iPhones) and Android Auto (for Android). 

Overall, Harman has about US$24bil (RM95.81bil) worth of orders from the automotive sector on its books. 

Harman also owns various well-known consumer electronics brands, such as Harman/Kardon, AKG and JBL. Samsung could thus leverage its new acquisition to strengthen its position in the audio equipment sector, particularly vis-a-vis major rivals such as Sony. 

Harman’s revenue was US$7bil (RM27.95bil) over the past year, and last Friday’s closing price of US$112 (RM447.22) per share marked a 28% spike following the Samsung purchase. 

Harman will act as an independent subsidiary under the Samsung company umbrella, while its chief executive Dinesh Paliwal will remain on board. The deal still has to be approved by shareholders and inspectors. — dpa

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