Did you know that Samsung used to make cars?
Fact: Samsung started Samsung Motors in the late 1990s, and still retains a minority stake after selling said company to Renault in the aftermath of the Asian Financial Crisis.
Following a spot of introspection after the Note 7 debacle, it is interesting to note that Samsung decided in a big manner – to be precise, $8 billion big – to return to the automobile, by shelling out said sum to acquire US automotive technology company Harman.
Significantly, this is the biggest ever overseas acquisition by a South Korean company.
Samsung has stated clearly they will not be in the business of manufacturing cars (a case of once bitten twice shy?), putting it beyond doubt that the pie they are eyeing is that of the connected car. Think about it – how much of our lives are spent in cars, in commute? A healthy – and potentially very lucrative – proportion with a very much captive audience.
Samsung has strengths in display, semiconductors, chips, mobile computing and batteries (no, seriously) – areas which would integrate and synergise very well into the future connected car, in particular one which is envisioned to be energy-efficient and reliant on rechargeable batteries and computers, with a more passive driver interacting via user-interface displays.
If Samsung can tap on the rich automotive experience of sister chaebol (Korean conglomerate) Hyundai/Kia or even their own Renault-Samsung Motors joint venture, they will have a distinct advantage here over pure tech players Apple and Google, both of which have made significant moves into the automotive industry.Samsung’s potential value chain integration and efficiencies, from production down to consumer experience, will blow the competition away – in a good way this time.