Samsung has no plan to become automaker
Harman CEO says it hopes to combine elements from both firms for ‘smarter automotive systems’
By Lee Min-hyung
Samsung Electronics has reaffirmed it has “no plans” to become an automaker, dispelling rumors that the Seoul-based technology giant may pose a potential threat to global automobile manufacturers following its high-profile takeover of Harman International.
“We made it very clear (to our automaker clients) that Samsung Electronics, by acquiring Harman, wants to become a primary smart mobility systems provider, rather than a carmaker,” Harman CEO Dinesh Paliwal told reporters in a press conference, Monday.
“Harman has a very similar future plan with Samsung,” he added. “Harman brings a very strong automotive portfolio, whereas Samsung offers expertise in such areas as sensors, displays, fifth-generation (5G) connectivity and mobility. The latest deal comes as we hope to combine these two elements from both firms and make smarter automotive systems.”
Young Sohn, president and chief strategy officer at the Samsung Strategy and Innovation Center, also denied the reports, adding the company hopes to generate broader synergy both in the business-to-business (B2B) and the business-to-consumer (B2C) sectors following the deal.
“We believe Samsung’s expertise in displays and video will help create much better products in collaboration with Harman’s audio expertise,” he said.
“User experience is getting more important for the future autonomous vehicles industry,” he said, adding that both firms expect new products, converged from their respective expertise, will be unveiled in 2018 at the earliest.
“Convergence of technologies is not an overnight thing, so we believe the latest deal should be considered from a long-term viewpoint,” he said. “For example, Harman’s unique sound systems may contribute to our mobile business.”
Last week, Samsung Electronics bought the US auto-systems manufacturer for US$8 billion (9.47 trillion won), as part of a group-wide strategy to boost its presence in next-generation growth areas.
The move came about a year after the company established the auto-parts division in December last year, in a bid to take advantage of the infant connected vehicles industry identified as a forthcoming growth engine for global IT firms here and abroad including Samsung, LG and Google.
“We have searched for a variety of options to boost our presence in the auto-parts industry since establishing the unit late last year,” he added. “We then reached an internal consensus that Harman which has a strong relationship with both consumers and corporate clients was the partner for us to speed up our plan to tap deeper into the promising industry.”
Harman generates more than 65 per cent of its revenue from the connected vehicles business. The firm is the market leader in the global auto-systems industry, with most of the global automobile giants as its clients, including BMW, GM, Lexus, Ford and Toyota, according to Harman.
Harman is also famous for its massive research and development in software sector, rather than sticking to being a manufacturing industry player.
The company has some 30,000 employees across the globe, with half of them being engineers. In particular, more than 80 per cent of its engineers are working on developing software, according to the company.