Innovation

Samsung makes $8B bet on connected car market with purchase of Harman International

The cash purchase marks Samsung's biggest move into the connected cars space yet, and will give the company new inroads in IoT and connectivity.

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Image: iStockphoto/Chesky_W

Samsung is making a major bet on connected cars: The company acquired US auto supplier Harman International on Monday for $8 billion cash, to increase its presence in the rapidly growing industry.

"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, in a press release. "We see substantial long-term growth opportunities in the auto technology market as demand for Samsung's specialized electronic components and solutions continues to grow."

Harman currently operates more than 30 million vehicles equipped with its connected car and audio systems. These systems include infotainment, telematics, and connected safety and security features, according to the press release.

The deal—the largest in Samsung's history—will benefit Samsung customers in the automotive industry, the press release said. "Combining Harman's leadership in new connected car technologies, including its top positions in infotainment, cyber security, over-the-air updates and telematics, with Samsung's significant expertise and experience in connectivity technologies, including 5G, UX/UI, display technology and security solutions, will enhance Harman's automotive and connected services businesses to drive greater sales and provide significant benefits as automakers speed the adoption of next-generation connected cars," the press release stated.

SEE: Why the connected car is one of this generation's biggest security risks (ZDNet)

It will also allow Samsung to harness Harman's audio systems from JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel. These brands will soon be available in Samsung's mobile, display, VR, and wearables products to improve the audio/visual experience, the press release said.

The acquisition of Harman will give Samsung new inroads into the Internet of Things (IoT) market as well, as the company will now have access to the 8,000 software designers and engineers who can help create "the next generation of cloud-based consumer and enterprise experiences," as noted by the press release. The partnership will also focus on end-to-end services for the auto industry, using design, data, and devices.

Outside of connected cars and IoT, Harman and Samsung's combined technologies will also be used for large-scale audio and visuals at stadiums and concert venues.

While this marks Samsung's largest move into connected cars, it's not its first: In February 2016, the company announced the Connect auto, a small box that plugs into a car's OBD II port and creates an AT&T 4G LTE WiFi hotspot for the car, TechRepublic news editor Conner Forrest reported. The tool also sends real-time alerts to the driver in an effort to improve safety.

The connected car industry is booming, and expected to grow to more than $100 billion by 2025, according to a Samsung analysis. But, as TechRepublic reported last week, these cars post major risks to the automakers building them, according to a new report from KPMG. A major cybersecurity breach could be life-threatening, the report said, and could have dire effects for automakers. KPMG also offered best practices to keep connected vehicles safe.

Attacks on connected automobile systems will continue to grow in number and sophistication in 2017, Sameer Dixit, senior director of security consulting at cybersecurity firm Spirent, recently told TechRepublic senior writer Dan Patterson. Vehicle access systems, engine control units (ECUs), remote key systems, V2X receivers, USBs, and OBD IIs will be the most vulnerable to attacks, Dixit said.

The 3 big takeaways for TechRepublic readers

  1. On Monday, Samsung announced the purchase of US auto supplier Harman International, representing a new push into the connected cars industry for the electronics company.
  2. Samsung hopes that bringing Harman's connected car capabilities in infotainment, telematics, and connected safety and security features will lead to greater sales and innovations in the connected cars space, according to a press release.
  3. While the connected car industry is growing rapidly, it also brings new cybersecurity risks that automakers need to prepare for, experts say.

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About Alison DeNisco

Alison DeNisco is a Staff Writer for TechRepublic. She covers CXO and the convergence of tech and the workplace.

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