M&A Activity is About Connected Cars

Regardless of how fast autonomous vehicles become mainstream, the connected-car is on the verge of reality.

The Siemens-Mentor deal announced yesterday is a prime example of one conglomerate’s desire to capitalize on the prospective market for connected technologies, which is projected to reach $100 billion or more in the coming decade. Another, less-publicized M&A also underscored this emerging trend.

Samsung announced it will buy Harman International, a deal that should accelerate the Korean OEM’s drive into the connected technologies market.

Harman is a major supplier of automotive electronics: its audio, infotainment, and connected safety and security systems are already in 30 million vehicles worldwide. In exchange for its $8 billion investment in Harman, Samsung will now have close ties to all the largest automakers around the globe.

From the USA Today:

The primary motivator for Samsung’s purchase of Harman is to tap into its automotive business,” said Jack Wetherill, senior market analyst at Futuresource Consulting. “This is absolutely about the connected car. Harman are major players in this business and Samsung are not. They know they need to get into it to leverage their IoT (Internet of Things), their smart home and smartphone businesses to effectively spread, develop and maximize their revenues and potential.”

What this all says is that despite the emergence of ride-share services like Uber and Lyft and Didi Chuxing, coupled with millennial angst about car ownership, no one sees the auto market shrinking any time soon.

The implication of that, then, is that there will be an equally — or perhaps even larger — opportunity for those that invest in smart infrastructure. After all, despite all the bells, whistles and Internet access, the role of the car is still to get the passenger from point A to point B as quickly and safely as possible.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow