Has Samsung blown up the IoT market with its HARMAN acquisition?


After blowing $17 billion in the Note 7 fiasco, what could Samsung have done next? Well, it could blow more money – and this time on IoT.



On November 14, 2016, Samsung announced the acquisition of HARMAN for $8 billion, taking the Korean giant into the HfS Winner’s Circle of IoT service providers, where HARMAN has performed for the last couple of years.

This acquisition follows the Samsung’s investment of $450 Million in Chinese Electric Car Company BYD, which it  announced in July 2016. These acquisitions sparked the idea that Samsung is finally entering the automotive industry to diversify its portfolio from its stagnating consumer electronics division.

However, in our opinion, acquiring HARMAN is not all about a foray in the automotive industry for Samsung – the rationale goes beyond automotive and extends to the IoT market, which is an opportunity worth hundreds of billions of dollars. The acquisition gives Samsung complete end-to-end capability in the IoT value chain, as we show here:


HARMAN has four business divisions that cater to different part of the IoT value chain:

  • Connected Car: Navigation, Multimedia, Connectivity, Telematics, Safety and Security Solutions
  • Lifestyle Audio: Premium Branded Audio products for use at home, in the car and on the go
  • Professional Solutions: Audio, Lighting, Video Switching and Enterprise Automation for Entertainment and Enterprises
  • Connected Services: Cloud, Mobility and Analytics Software Solutions along with OTA update technologies for Automotive, Mobile, and Enterprises

Samsung Electronics has three business divisions that cater to different part of the IoT value chain:

  • Consumer Electronics: Digital TVs, monitors, printers, air conditioners and refrigerators
  • IT & Mobile Communications: Mobile phones, communication system, and computers
  • Device Solution: Memory and system LSI in the semiconductor business and LCD and OLED panels in the display business

The combination of Samsung and HARMAN will be a formidable force in IoT. We rated HARMAN in our “Winner’s Circle” in our IoT Blueprint.

In IoT, HARMAN and Samsung will have a very strong position in the connected car or automotive IoT segment. In our IoT study, we found out that connected car is the third largest segment after industrial IoT and smart cities. The HARMAN’s hardware capability also gives Samsung chance to play in the hardware IoT space. 

Samsung has been investing in IoT from some time. In 2014, it acquired SmartThings, provider of the smart home platform. In June 2016, Samsung acquired Joyent, a leading cloud provider that can help Samsung connect the users of its devices to the cloud and IoT platform. Samsung has developed ARTIK IoT platform solutions. The HARMAN acquisition augments its IoT capabilities further with the connected car expertise and full IoT services portfolio. The combined HARMAN and Samsung offerings will get a strong foothold in both consumer electronics and connected car IoT market, developing an end-to-end solution for design, data, and devices.

IoT expertise has one additional benefit. It can help Samsung to differentiate its core consumer electronics products. HARMAN has already differentiated itself in the commoditized infotainment business with innovative connected car solutions.

Bottom Line

HARMAN  brings real differentiation to Samsung and open the firm up to a huge future opportunity of it gets this right.

HARMAN is a strategic fit for Samsung for IoT and the combined HARMAN and Samsung will have strong IoT capabilities and credentials. Will Samsung blow this again or will HARMAN be the man for Samsung. Keep watching our IoT coverage.


Posted in : Procurement and Supply Chain


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