Updated: Jan 3
Written by: Larry Goodfellow
Smart Car Market
Being first is everything for tech giants such as Apple, Samsung and Google. In a recent article entitled, Amp my Ride in The Economist they detail how Samsung has sought to break into the smart car market with its recent purchase of Harman for $8 billion dollars. The article begins with a quote from Jeff Williams, an executive at Apple, “The car is the ultimate mobile device.” As Apple and Samsung continue to fight for dominance in the smartphone industry, it is no wonder that they are looking at smart cars as the next big market in which to gain dominance. We see many clients looking to market research online communities as a way of testing new product ideas to save money and be more effective in product development. Samsung is seeking to enter this market through its purchase of Harman, a U.S. based company that makes “internet-connected audio, information and security systems for cars.”
The Economist article explains how Harman is best known for its sound systems but has become one of the world’s biggest suppliers of parts for “connected cars.” The company has been developing smart parts that help drivers by linking devices to the internet. For anyone doubting how near smart cars are to being a reality, you only need to look at Harman’s revenue for 2016. From January to September, the company made $7 billion in revenue, and two thirds of that coming from their car sector. There are currently 30 million cars using Harman’s audio, and services such as real-time traffic updates, and alerts on braking distances. It is expected that by 2022 Harman’s revenue will dramatically rise due to the demand for “connectivity.”
Autonomous Cars and Samsung
This is not the first step Samsung has made towards futuristic cars. It has invested in Vinli and nuTonomy which are two startups that create software for connected cars, according to The Economist. The article goes on to mention that last year Samsung created a team to start working on parts for autonomous cars. Samsung also has SDI which makes lithium-ion batteries used for electric cars.
The deal with Harman allows Samsung access to Harman’s current dealings with 30 some global car brands. These relationships will allow Samsung to begin offering hardware, and software which it will be able to sell directly to automakers. It remains to be seen whether Samsung will be building smart cars or simply providing the parts and software that smart cars will require.
Samsung has been desperately trying to get a handle on its bad press related to its smartphone division. The company’s Galaxy Note phones have been exploding and their new line has halted release as they too have been reportedly having problems. We shall see how Samsung is able to handle these setbacks, as well as how they will be able to compete with giants like Apple, Google, and their rival Chinese smartphone maker Xiaomi who also have been filing patents related to internet-connected cars.
The Future Challenge for Harman
The real challenge will be to understand the 30 some car companies that Harman currently deals with, and whether they will be able to understand and predict future needs of these companies in the design of the software and parts. Samsung will have to be in close communication with the car manufacturers and their customers, and be able to understand and predict the needs of these two groups before they arise.
While your company may not be in such a race to produce products, every company is in need of understanding their clients’ needs and be able to create products that fit, before the competition.
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