Samsung surprised the automobile world with its acquisition of Harman International for $8 billion. It was Samsung’s largest ever overseas acquisition. The deal signaled that the company could take on Apple and Google in smartcar technology. Is the Korean company planning to build a car to take on the rumored Apple car? Though it already has a stake in Chinese electric vehicle maker BYD, Samsung is unlikely to build a self-branded vehicle.
Samsung has no intention to build cars
Harman supplies 3D navigation, active safety systems, and audio equipment to carmakers like Volkswagen, BMW, and General Motors. When announcing the deal, Samsung Electronics President Young Sohn said the company had no intention to build a car. The Korean company could use Harman to introduce its own “infotainment” platform or a more comprehensive connected-car systems.
According to Bloomberg, Samsung wants to be seen as a friend to automakers rather than a rival. Most of the automakers want to give their vehicles smartphone-like capabilities. But they have been reluctant to give companies like Apple and Google unfettered access to their dashboards. They fear that Google and Apple could mine data for their own uses. Also, many carmakers see Apple as a potential competitor.
Samsung an attractive partner to automakers, not a rival
Samsung could combine the 5G network it is developing with its electronics expertise and Harman’s presence in dashboards to offer a fast and complete package of connected-car systems. By signaling its intent of not building a car, Samsung has assured automakers that they would not be helping a potential competitor. Samsung President Young Sohn said several automakers had approached the company, seeking help with technologies like AI, 5G, and memory.
Gartner research director Jim Hines said automobile companies could welcome Samsung’s acquisition of Harman. Carmakers want to control the revenues generated from connected-car systems as well as customer data. Samsung is positioned to be a more attractive partner as Harman is already a supplier to most automakers. Meanwhile, Apple’s CarPlay, which debuted about three years ago, is far from success.
Apple car to feature augmented reality
The not-so-secret Apple car project has been facing a lot of obstacles. The Cupertino company was previously rumored to be designing a full-fledged car. But it later shifted focus to developing autonomous driving systems. It would allow the iPhone maker to partner with an existing automaker or design its own car in the future.
KGI Securities analyst Ming-Chi Kuo recently said in a research note that the Apple car could feature augmented reality that could give it 3-5 years lead over rivals. Apple CEO Tim Cook has been bullish on augmented reality. He said in an interview with Good Morning America that AR would eventually become a bigger opportunity than virtual reality.