Samsung has announced this morning it’s buying US audio company Harman in an all-cash deal worth $8 billion. The acquisition is Samsung’s largest ever, and places the electronics company in the vanguard of the automotive industry — which Harman supplies with infotainment technology. This space has become of increasing interest to tech companies in recent years as cars become more connected.
Samsung says its expertise in displays, user interfaces, and semiconductor technology would create “significant growth opportunities” for Harman’s auto-parts business. The latter company, which owns a number of brands including Harman Kardon, AKG, and JBL, is expected to double its revenue over the next five years. The firm recently struck large deals with conglomerates including Fiat Chrysler and General Motors, and as of June 30th this year had a backlog of orders worth approximately $24 billion.
The cars of the future need screens, software, and plenty of processors — samsung’s bread and butter
“Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time,” said Samsung CEO Oh-Hyun Kwon in a press release. “[This acquisition] immediately establishes a strong foundation for Samsung to grow our automotive platform.”
The South Korean company’s push into the automotive world will likely bring it into competition with other tech giants like Google and Apple. Although much of the focus on Silicon Valley’s car ambitions has been on self-driving capabilities, outfitting vehicles with more prosaic connected technology could be more immediately lucrative. Earlier this year it was reported that Apple had scaled back its car initiative, dropping plans to build its own electric vehicle in favor of developing software for existing automakers.