Nov 30, 2016: Aiming to revolutionize the Internet of Things (IoT) domain, and make long-term growth in the auto technology market, Samsung has acquired car audio and electronics manufacture Harman, which is the parent company to Martin, a provider of lighting solutions.
Samsung has been investing in the IoT as more and more lighting firms see good business in this domain. The acquisition deal has been signed at $8 billion as a part of the company’s business strategy.
IoT is seen by the LED lighting industry as a potential business market as the industry is threatened by falling margins and the saturation point has made LEDs losing its value. Samsung has also been long eyeing the IoT lighting market, and had also launch a smart lighting module to improve connectivity in IoT lighting applications.
Although Samsung’s acquisition has been done with the aim to increase the company’s position in the automotive LED lighting industry, the acquisition would also help Samsung to develop strong position in the IoT lighting operation.
“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,’ said Young Sohn, president and chief strategy officer of Samsung Electronics.
Another reason behind the acquisition
With smartphones and smart wearables, Samsung has established a strong position for itself against its rivals like Apple’s and Google. But it lagged behind in one area—the auto market. Here Apple is present with its CarPlay and Google is present with its Android Auto. But Samsung users are still stuck with MirrorLink, a not so popular protocol which is also used in Sony and HTC devices.
Now by buying Harman, Samsung becomes a Tier 1 auto supplier, and aims to generate cost-cutting synergies by integrating vertically its processor and display businesses. Harman’s future products will also be developed with Samsung’s ecosystem in mind.
Now, a user who owns a Samsung phone, or SamsungSmartThings, smart appliances, and a Harman-equipped car, would definitely have their personal data synchronized across all three hubs. This has been Samsung’s game-changing expansion plan as well as a strategy to stand against Apple in the auto technology market as well.