Samsung Electronics has reaffirmed it has "no plans"
to become an automaker, dispelling rumors that the Seoul-based
technology giant may pose a potential threat to global automobile
manufacturers following its high-profile takeover of Harman
International.
"We made it very clear (to our
automaker clients) that Samsung Electronics, by acquiring Harman, wants
to become a primary smart mobility systems provider, rather than a
carmaker," Harman CEO Dinesh Paliwal told reporters in a press
conference, Monday.
"Harman has a very
similar future plan with Samsung," he added. "Harman brings a very
strong automotive portfolio, whereas Samsung offers expertise in such
areas as sensors, displays, fifth-generation (5G) connectivity and
mobility. The latest deal comes as we hope to combine these two elements
from both firms and make smarter automotive systems."
Young
Sohn, president and chief strategy officer at the Samsung Strategy and
Innovation Center, also denied the reports, adding the company hopes to
generate broader synergy both in the business-to-business (B2B) and the
business-to-consumer (B2C) sectors following the deal.
"We
believe Samsung's expertise in displays and video will help create much
better products in collaboration with Harman's audio expertise," he
said.
"User experience is getting more
important for the future autonomous vehicles industry," he said, adding
that both firms expect new products, converged from their respective
expertise, will be unveiled in 2018 at the earliest.
"Convergence
of technologies is not an overnight thing, so we believe the latest
deal should be considered from a long-term viewpoint," he said. "For
example, Harman's unique sound systems may contribute to our mobile
business."
Last week, Samsung Electronics
bought the U.S. auto-systems manufacturer for $8 billion (9.47 trillion
won), as part of a group-wide strategy to boost its presence in
next-generation growth areas.
The move came
about a year after the company established the auto-parts division in
December last year, in a bid to take advantage of the infant connected
vehicles industry identified as a forthcoming growth engine for global
IT firms here and abroad ― including Samsung, LG and Google.
"We
have searched for a variety of options to boost our presence in the
auto-parts industry since establishing the unit late last year," he
added. "We then reached an internal consensus that Harman ― which has a
strong relationship with both consumers and corporate clients ― was the
partner for us to speed up our plan to tap deeper into the promising
industry."
Harman generates more than 65
percent of its revenue from the connected vehicles business. The firm is
the market leader in the global auto-systems industry, with most of the
global automobile giants as its clients, including BMW, GM, Lexus, Ford
and Toyota, according to Harman.
Harman is
also famous for its massive research and development in software
sector, rather than sticking to being a manufacturing industry player.
The
company has some 30,000 employees across the globe, with half of them
being engineers. In particular, more than 80 percent of its engineers
are working on developing software, according to the company.
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