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Samsung wants in on car electronics, just paid $8 billion for Harman

samsung to acquire harman etos rinspeed interior

Harman's Life-Enhancing Intelligent Vehicle Solution (LIVS) concept

South Korean electronics giant Samsung will acquire Harman International Industries in a deal worth approximately $8 billion, the company announced on Monday. This will give Samsung a greater presence in the realm of automotive electronics.

“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,” Young Sohn, chief strategy officer of Samsung Electronics, said in the press release. Samsung hopes to use Harman’s status as a Tier 1 automotive supplier to take advantage of this trend.

In its announcement of the takeover, Samsung noted 65 percent of Harman’s sales in the last year were automotive related. The company, which sprang from audio brand Harman Kardon, founded in 1953, deals primarily with audio systems and technologies related to connectivity. It already has existing relationships with several automakers, and employs 8,000 software designers and engineers, Samsung said.

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Harman has developed increasingly elaborate connected car systems. At CES 2016, it debuted a system that tracks a driver’s pupil dilation to measure fatigue, as well as a scalable connected car platform called Life-Enhancing Intelligent Vehicle Solution (LIVS) that incorporated features like 3D navigation and personalization options for entertainment.

The company also controls several audio brands, including the original Harman Kardon brand, JBL, Mark Levinson Audio Systems, Infinity, AKG Acoustics, Lexicon, and Revel. It also licenses the Bowers & Wilkins and Bang & Olufsen brand names for automotive use. Most recently, Harman made a deal with Ford to supply audio systems under the Bang & Olufsen-derived B&O Play brand as premium options in the automaker’s cars.

The acquisition of Harman is the latest attempt by Samsung to gain a foothold in the automotive industry. The company’s Samsung SDI battery division already supplies batteries to multiple carmakers and will be one of two battery suppliers for Audi’s upcoming electric SUV. Earlier in 2016, Samsung paid $450 million for a 1.92-percent stake in Chinese automaker BYD, which also counts Warren Buffett among its investors.