The deal will give Samsung a leg up in the connected car market: Harman's infotainment, telematics, and security systems are embedded in more than 30 million vehicles.
But more than just automotive dividends, it provides Samsung with access to audio brands including JBL, Harman Kardon, and Bang & Olufsen, as well as Harman's 8,000 software designers and engineers working on Internet of Things devices.
"Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time," Samsung Electronics CEO Oh-Hyun Kwon said in a statement.
AT&T in August began selling the Samsung Connect Auto; the device plugs into a car's on-board diagnostics 2 port (usually below the steering wheel) to turn any post-1996 vehicle into a mobile hotspot. Passengers can link up to 10 devices—phones, tablets, laptops—and tap into the companion iOS and Android app to track their car's location and receive maintenance notifications.
"The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become smart devices over the past decade," said Young Sohn, Chief Strategy Officer at Samsung. "We see sustainable long-term growth opportunities in the auto technology market as demand for Samsung's specialized electronic components and solutions continues to grow."
Once the transaction is complete—likely in mid-2017—Connecticut-based Harman will continue operating as a standalone subsidiary, led by CEO Dinesh Paliwal.
"Combining Samsung's strengths in leading-edge displays, connectivity and processing solutions with Harman's technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers," Paliwal said. "Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace."
See what PCMag's Sascha Segan and Max Eddy have to say about the deal in today's episode of Random Access, embedded below.