South Korean electronics giant Samsung has just announced that it has acquired Harman International Industries for around $8bn. Harman owns a portfolio of brands well known among musicians and producers, including AKG, Lexicon, JBL, DigiTech, dbx, Soundcraft and Studer, to name but a few. What the takeover will mean for Harman’s audio companies is unclear, however.
Why Harman? Evidently its success in the lucrative car audio market. But perhaps more importantly for Samsung planners, Harman has been developing solutions for car connectivity, which Samsung sees an important future market. In their press release, Samsung talk about “the vehicle of tomorrow” and refer to Harman as a “Tier 1 automotive supplier”. Neither pro audio nor music production figure in the release at all.
Harman’s car audio sales account for 65% of its annual $7bn revenue, according to Samsung. We can estimate the business done with individual pro audio brands will be tiny in comparison. What will Samsung do with them? Will we see headphones, studio reverbs and audio mixers with a Samsung logo?
Pump and dump
No, of course not. But Harman employees working in pro audio are likely feeling a bit insecure about their future right now. It’s not a very lucrative industry. When compared to, say, consumer electronics or the automotive industries, revenues are tiny. Many firms barely manage to break even. Nobody works or invests in pro audio to get rich. For us audio people, firms like Soundcraft and Studer are legendary; many Samsung employees probably had to Google them after the acquisition, if they bothered at all.
I see two scenarios here. Either Samsung will be hands-off, and keep Harman as an independent business unit while letting them get on with it. That would be the best outcome for Harman’s pro audio brands. Or the new owners decide to “reorganise” and pare away all the activity unrelated to their target car market, keeping all the relevant audio know-how and dumping the rest. A conceivable scenario, but perhaps less likely.
We’ll keep you up to date on developments. Do you work at one of Harman’s audio companies? Let us know your views – anonymously, if you prefer…