Despite a rocky start and challenges along the way that had many questioning the logic of this acquisition, Harman's acquisition is now paying off big time for Samsung, becoming the engine of growth that it was acquired for in the first place.
Harman is making money hand over fist
Harman didn't perform well for Samsung initially and lacked synergy with the Korean conglomerate. This prompted many industry watchers to claim that this acquisition was a mistake. Less than a decade down the line, Harman's profitability has improved significantly and the products that it has developed with Samsung are now leading the market.
It's now making a lot of money for the company. Harman posted $902 million in operating profit last year, the most since its acquisition by Samsung. In the fourth quarter of 2024, Harman's profit was double that of Samsung's TV and home appliance divisions.
Harman has improved its competitiveness in the home audio market through innovative new products and tech acquisitions. It has also worked extensively on audio and connected car systems which are now equipped in more than 50 million vehicles.
Deepening collaboration with Samsung's other business units working on in-vehicle technology helped Harman win new deals for digital cockpits and other in-car experiences with companies like BMW and Ferrari.
The deal was Samsung's first major acquisition under Samsung Electronics Chairman Jay Y. Lee who was a member of the company's board at that time. Lee is no longer on the board and many have since been calling for his return so that the company may be able to better face its challenges.
Samsung's also sitting on more than $100 billion in cash and having Lee back on the board may result in more acquisition activity.
