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Samsung Electronics Co. has presented its strategy to become the best supplier of auto parts, particularly infotainment products, in the smart car age to come after the South Korean electronics giant completed acquiring Harman International Industries Inc., a global leading automotive electronics company.
“(After Samsung announced earlier this month that it will buy Harman), I have met many key automotive customers including Hyundai Motor in the past week, and the reaction from them was mostly very positive,” Harman International CEO Dinesh Paliwak said in a joint press briefing at Samsung Electronics’ Seocho headquarters in southern Seoul on November 21. “We made it very clear that Samsung, by acquiring Harman, wants to be a Tier 1 solution supplier for smart cars, rather than entering into car manufacturing”
Paliwak also added that they expect to create a synergy effect in not only infotainment systems but also audio and security sectors resulting from the Samsung-Harman deal, and to secure a business-to-business (B2B) solution market based on it.
In regard to cyber security, he said, “When an era of connected cars comes, cyber security solutions are the most important. Harman recognized the fact before any company and took over an Israeli automotive cyber security company. Samsung also has a security solution called Knox. Combining the two solutions after completing the merger, we can expect to see considerable synergy.”
Samsung Electronics also said that it will focus on automotive infotainment component business. Park Jong-hwan, vice president of Samsung's automotive electronics business division, said in the press conference, “Samsung's purchase of Harman itself shows that we will not be making cars but to ultimately become a Tier 1 component supplier for smart cars. The PC age passed in the last decade and we are in the smart phone age in a decade now. In the next 10 years, the smart car market will become larger than the smartphone.” He stressed that the company can strengthen the competitiveness when integrating its competence in the semiconductor and display sectors with Harman’s technology.
In addition, Park added that Samsung Electronics and Harman will be able to release collaboration products in earnest from early 2018 when they complete the merger process by the end of next year, and they will cooperate in various areas such as smartphones, TVs and audio systems as well as automotive infotainment systems. Meanwhile, Paliwak had a meeting with Samsung Electronics Vice President Lee Jae-yong on the same day to discuss ways to develop future cars and automotive electronics parts business, and Samsung agreed to help Harman to play a crucial role in the automotive electronics parts sector in order to create a synergy effect.