Back in 2017, Samsung acquired Harman, the market leader in connected car solutions, for $8 billion. While the Korean firm had expectations of accelerating its growth in automotive and connected technologies, the company faced a few rough years at the start. However, Harman has reported major profits and improvements in 2024, with consistent growth seen since 2021.
Harmanโs surprising success proves doubters wrong
The audio and automotive company struggled in the initial years, which was contrary to expert predictions โ industry analysts had expected Harman to boost revenue right from the beginning. Industry watchers were left questioning whether acquiring Harman in the first place was a good idea.
However, as per a report from KED Global, Samsungโs acquisition has finally given very positive and satisfactory results. Thereโs no doubt that Samsung was aiming for a long-term strategy, and the performance of Harman has been brilliant in the past few years.
Image Credit: HARMAN International (Via KD Global)
Looking at Harmanโs profit chart over the years, Harman reported an operating profit of 559.1 billion won in 2021. Its operating profit grew to 880 billion won in 2022. The trend continued in 2023, with over a trillion won in operating profit โ1.17 trillion won. The current peak is in 2024, with the company reporting a massive operating profit of 1.3 trillion won. Notably, in Q4 2024 alone, Harman reported 400 billion won in operating profit โ double that of Samsungโs TV and home appliance divisions.
There are several reasons for Harmanโs recent success. Samsung played it strategically and captured the audio and automotive market. The company targeted younger generations, like millennials and Gen Z, with its JBL brand, mainly in the US. JBL products are now sold directly through Samsungโs online store. Harman owns several brands like Harman Kardon, JBL, AKG, Lexicon, Mark Levinson, and more.
Samsung focused on strengthening Harmanโs automotive sector as well. The company can now supply digital cockpits, head-up displays, and infotainment systems to global automakers such as BMW and Toyota Motor. Harman also works on car audio systems with clients like Hyundai, Audi, Volkswagen, and many others.
Harman is now a cash cow for Samsung, and both investors and analysts finally see it as a successful acquisition.
