Still in the wake of a massive product failure that threatened to mar its priceless reputation built from years of cutting edge innovations in general electronics and mobile technology, Samsung is out again on one its adventurous moves with technology. This time with perhaps potentially one of the most significant revolution in the auto industry in the 21st century, Smart Cars.
The South Korean electronics giant said on Monday it was buying Harman International Industries (HAR), a U.S. firm that makes infotainment, safety and security systems for cars.
Tech giants have been pouring money into the auto industry: Apple is working on a secretive car-related project and Google (GOOGL, Tech30) is developing self-driving vehicles. Last month, chip maker Qualcomm (QCOM, Tech30) splashed out $39 billion on NXP Semiconductors (NXPI), the leading player in automotive computer chips. It was the second biggest tech deal ever.
Samsung (SSNLF) says it expects the automotive electronics market to be worth more than $100 billion by 2025, and is determined to be part of this projected boom in an industry that is destined for a continuous rendezvous with innovation.
Late last year, the company set up its own auto components business to work on self-driving cars and infotainment. But buying Harman puts it on the major playersâ€™ league: more than 30 million vehicles already use the U.S. Companyâ€™s technology. Samsung is offering $112 in cash for each Harman share, 28% higher than the stock's Friday closing price; an outright show of absolute confidence in its potential for massive returns.
What more? More spendable cash might just be available for giant techs and the likes, at least following the election of a man who has portrayed himself as the Reagan of the 21st century, Donald Trump, with a promise to provide massive tax cuts for American businesses or at least operating in the country and the for all we know: this might just be the big leverage these guys need to move technology innovation to the next level.