Harman CEO Shows Expected Synergy with Samsung: "We Will Create an Experience No One Else Can Offer"

Son Young-kwon, Chairman of the Board of Harman (left), and Michelle Mauzer, CEO of Harman, are having a conversation. (Photo by Nextwave)

[Asia Economy Reporter Jeong Hyunjin] "If Harman and Samsung collaborate, they can create an experience that no one has ever provided before."

Michelle Maucher, CEO of Harman International, expressed her determination to enhance synergy with Samsung Electronics. Although the automotive division, which accounts for the largest portion of sales, has faced difficulties due to the COVID-19 pandemic last year and semiconductor supply shortages this year, they plan to collaborate in step with the rapidly changing mobility market.

According to industry sources on the 9th, Maucher CEO recently stated in a NextWave dialogue with Son Young-kwon, Chairman of Harman's Board (former Chief Strategy Officer of Samsung Electronics), "(The collaboration between the two companies) has tremendous potential. It depends on us," he said. Maucher CEO added, "Samsung is a large company with extensive experience," and "bringing customer experience into cars will be an important opportunity in the future market." Maucher joined Harman in 1997 and was appointed CEO in April last year.

Son, who was involved in Samsung Electronics' acquisition of Harman in 2016, emphasized, "The two companies are currently collaborating in 5G, software, and mobile," and "considering the size of the companies, we can achieve more." He also described the collaboration between the two conglomerates as "not a sprint but a marathon," evaluating that if customer-centric Harman and technology-focused Samsung join forces, they will form a complementary relationship.

This dialogue came amid questions about the synergy between the two companies four years after Samsung Electronics acquired Harman for $8 billion in March 2017. Samsung's acquisition of Harman is the largest overseas M&A by a Korean company, and since it was directly led by Samsung Electronics Vice Chairman Lee Jae-yong, market expectations for synergy were high.

However, Harman posted sluggish performance last year due to the impact of COVID-19. Harman's sales last year were 9.1837 trillion KRW, down 8.9% from the previous year, and operating profit was 55.5 billion KRW, reduced to one-sixth of the 322.3 billion KRW recorded in 2019. In the first quarter, operating profit showed a relatively recovering trend at 113.1 billion KRW, but the market evaluates that it fell short of expectations. At the time just before the acquisition in 2016, Harman's operating profit exceeded 800 billion KRW.

Maucher CEO said, "Unlike previous crises, COVID-19 made it difficult for our core businesses to offset each other," mentioning that major businesses such as the automotive division and consumer audio division are gradually recovering. However, although the automotive division recovered faster than expected from the COVID-19 impact, the semiconductor shortage continues, and they are closely monitoring the negative impact arising from this.

In this dialogue, Maucher CEO shared his views on the future of mobility. He said, "We are focusing more on the experience inside the car than before. The time we spend in cars will completely change in the future," and predicted, "Elements we previously considered important, such as the engine, acceleration, and maximum speed, will certainly shift to other factors, and the experience inside the car will become more important."

This content was produced with the assistance of AI translation services.