"Harman is also known for its audio equipment, under names like Harman Kardon and Bang & Olufsen."
Actually, they have something like 20 audio brands including ones like AKG, Soundcraft and JBL. I don't know what their automotive business is, but I bet their audio side makes up the majority of their yearly sales (and the automobile side is probably also mostly audio as well).
Actually, no. The vast majority of Harman's sales comes directly from the OE automotive business. A chunk comes from Pro audio (think stadiums, arenas, touring bands, movie theaters, recording studios and new building construction). The smallest part of the business is the consumer/home audio business.
Do you (or Gatorguy) have a breakdown for that?
As someone who works in automotive, I know that a lot of head units (radios/stereos) in vehicles are made by Harmon. It could very well be that these sales outpace all their other audio sales given the large number of vehicle sales every year.
However, I have never seen anything outside of head units or telematics in vehicles made by Harmon. If you look at other OE suppliers (Valeo, Bosch, Siemens, Continental - yes the tire company) you see instrument clusters, climate controls, airbag computers, stereo/nav systems, heads up displays, suspension control, braking systems, autonomous driving components - the list is endless.
So to say that this purchase "will automatically catapult it into the highest levels of automotive tech suppliers, " is a bit of stretch, since even lesser known companies (like Valeo, for example) have 2x the yearly sales of Harmon while heavyweights like Bosch have 10x while developing systems for the entire vehicle, not just infotainment.
From the press release, which is all I'm familiar with. "Approximately 65% of HARMAN’s $7 billion of reported sales during the 12 months ended September 30, 2016 are automotive-related, and its order backlog for this market at June 30, 2016 was approximately $24 billion."
Still doesn't change my comment about the fact that Harmon is still a small time player in automotive (as compared to other suppliers) and they only provide products in a very narrow range (infotainment and telematics).
The article implied this purchase by Samsung puts them on par with the big players. It doesn't.
I kinda agree with you based on what I've read tho you hadn't mentioned that point in your post I initially replied to.
Since I work in Pro Audio and deal with a number of companies that were acquired by H.I. over the years, I'll be watching for changes in parts and support. Hopefully they won't screw with these smaller companies. Maybe spin them off?
Apple lost a huge opportunity. Harman has class, design chops, and is already in the dashboard of every high end auto manufacturer. At this point, we have to reluctantly accept the fact that this plays into the narrative that the company lacks a clear strategy/vision. At least, none that is evident.
And it's painful to watch the stock getting pounded. Yes, I know that tech is taking a hit, but Apple is getting massacred.
Tim Cook's lack of vision is ridiculously bad. The guy needs to be replaced ASAP before the Apple brand loses its shine.
The guy is a nuts and bolts guy.
Seems like the only vision Cook has is to make political statements and use Apple to push his social agenda. MAKES ME SICK.
The guy is literally costing Apple shareholders HUNDREDS OF BILLIONS in value. With a competent CEO Apple would be worth more than a TRILLION DOLLARS.
I'm glad Apple doesn't focus on your bottomline...If Apple makes you so sick then sell your stock and stop bitching! Go elsewhere....instead you choose not to.
Why the hell would I sell a stock that I personally feel is undervalued by at least 50-75%?
Why the hell would I sell a stock that is literally a new competent CEO away from going up $400 billion in value?
Hell no. I'm waiting it out. No way Tim Cook is going to cause me to sell my stock. I will out last him
So you would stop bitching about Apple's stock and Tim Cook. Plain and simple. You really don't care what Apple does as long as it makes you money. They could sell POS $199 Macs which raises the stock price to $800/share and you'd be perfectly happy with that even though it would ruin the company's values. This is why I like it when Apple ignores the stock market.
Wish Apple would have purchased this instead of Beats.
Why? Do they have a streaming service too? No? Okay, how about expertise in popular music and a group of people who can strike exclusive deals. No?
Right.
As much as you wish otherwise, Beats was a good buy.
Apple gave us iTunes. You're telling me they couldn't deliver a streaming music service without spending $3 billion on Beats? Apple is also making a play for the connected car. Outside of CarPlay they have very little foothold in the connected car space. That's why I think it would have been a smarter buy.
What difference does that make? They've already made their money back on the streaming service and then some. Beats brought in what Apple needed, which was some people that were already in the music business. They kind just bought people and a service that was already started, but again it worked out for the better. And just because Apple bought Beats, doesn't mean they can't also buy Harman or any other similar business.
We also don't really know how far Apple is with this car project. Everything we hear is based off rumors and speculation.
Apple bought Beat, a lot cheaper! And why does Apple need to waste money on that such as company? Apple can just put the damn iPad Mini with some harness and it becomes 100x better than a Harmon Kardon head unit. Music nowadays in the cars is streaming or subscriptions thru satellite radio which requires separate satellite unit or even thru apps. Samsung tries to throw things to the wall to see what sticks again...buying a car music hardware company is really a failure! Apple doesn't need it it.
Apple bought Beat, a lot cheaper! And why does Apple need to waste money on that such as company? Apple can just put the damn iPad Mini with some harness and it becomes 100x better than a Harmon Kardon head unit. Music nowadays in the cars is streaming or subscriptions thru satellite radio which requires separate satellite unit or even thru apps. Samsung tries to throw things to the wall to see what sticks again...buying a car music hardware company is really a failure! Apple doesn't need it it.
Again, If it weren't for the Apple Car rumor this wouldn't have happened. The domino effect is funny
[...] I wonder how Samsung will handle Harman's range of audio brands. Under the Harman umbrella, they operate fairly autonomously and each focus on specific market niches.
I've always considered the acquisition of an audio equipment manufacturer by Harmon to be a bad thing.
Lexicon, AKG, and Soundcraft all tipped heavily towards more gimmicky and/or prosumer products after being acquired by Harmon. Admittedly the entire pro audio market has slipped that way over the last couple decades so it may not be Harmon's influence, but it does make me wonder.
Regardless, it's hard to imagine how the Samsung buy is going to be good for the pro audio industry, though I suppose there may be an upside I just haven't thought of.
I know a lot of people hate this idea, but if Apple were to do a big acquisition, I'd vote Tesla. Elon Musk has ideas for very big things that actually could employ $200 billion in cash. Tesla's problem is that it's undercapitalized. Apple's problem is a lack of a big idea for inventing it's capital. They're the perfect match.
Obviously it'd be amazing to watch and the part of me that cares about this planet would love to see it happen to bring solar roofs and home batteries mainstream over night. A couple of issues with it would be as follows, however. Elon and company would culture clash with Apple. That's my impression. This in turn could be a disaster for Apple. Also and for a similar argument, Tesla are a technology-first company and Apple is a design-first company. Tesla don't have great taste. It might seem like a minor detail but I don't believe it would be.
Whoever did buy them right now though, their market cap is at a great value for what you're getting. Considering WhatsApp were over half that value without a profit centre.
I'd prefer to see Apple work on their own car and acquire Netflix (~$80B). Netflix understand new content like no other company and over night it'd put Apple on the map re new TV content. I also feel like it'd fit a need within Apple and be a culture match for Apple. Over time they could rebrand the service Apple TV and offer Apple customers a discounted price on the service. $6.99 versus $9.99 for people outside the ecosystem. In the grand scheme $10 makes more sense for the service as it's still a good value at that price and allows the service to remain ad-free. Similar to how every musician back in the day wanted to be on iTunes, every TV production on the planet and upcoming filmmaker/documentary maker wants to be on Netflix. Apple could own this and it'd solidify Apple TV's place in the living room. And if further reduce the 32 GB ATV to $99 and release an Apple branded first party gaming controller to treat gaming with the respect it deserves. So you sort living room, ATV, content and gaming over night.
Apple lost a huge opportunity. Harman has class, design chops, and is already in the dashboard of every high end auto manufacturer. At this point, we have to reluctantly accept the fact that this plays into the narrative that the company lacks a clear strategy/vision. At least, none that is evident.
And it's painful to watch the stock getting pounded. Yes, I know that tech is taking a hit, but Apple is getting massacred.
Jim Cramer had been pushing for Apple to buy Harmon for a long time. Samsung might be buying for the sake of buying but they're taking good companies/products off the market that would probably be better put to use in someone else's hands.
Trump should employ Cramer. Two mentally ill people with their heads together just might form a human being.
Apple lost a huge opportunity. Harman has class, design chops, and is already in the dashboard of every high end auto manufacturer. At this point, we have to reluctantly accept the fact that this plays into the narrative that the company lacks a clear strategy/vision. At least, none that is evident.
And it's painful to watch the stock getting pounded. Yes, I know that tech is taking a hit, but Apple is getting massacred.
Jim Cramer had been pushing for Apple to buy Harmon for a long time. Samsung might be buying for the sake of buying but they're taking good companies/products off the market that would probably be better put to use in someone else's hands.
It's not exactly a done deal tho. Some shareholders think Harman management sold out too low and are pressing to void the pending sale.
Comments
Hopefully they won't screw with these smaller companies. Maybe spin them off?
We also don't really know how far Apple is with this car project. Everything we hear is based off rumors and speculation.
Again, If it weren't for the Apple Car rumor this wouldn't have happened. The domino effect is funny
Let's see how this is going to affect the industry and uptake of CarPlay...
Lexicon, AKG, and Soundcraft all tipped heavily towards more gimmicky and/or prosumer products after being acquired by Harmon. Admittedly the entire pro audio market has slipped that way over the last couple decades so it may not be Harmon's influence, but it does make me wonder.
Regardless, it's hard to imagine how the Samsung buy is going to be good for the pro audio industry, though I suppose there may be an upside I just haven't thought of.
Whoever did buy them right now though, their market cap is at a great value for what you're getting. Considering WhatsApp were over half that value without a profit centre.
I'd prefer to see Apple work on their own car and acquire Netflix (~$80B). Netflix understand new content like no other company and over night it'd put Apple on the map re new TV content. I also feel like it'd fit a need within Apple and be a culture match for Apple. Over time they could rebrand the service Apple TV and offer Apple customers a discounted price on the service. $6.99 versus $9.99 for people outside the ecosystem. In the grand scheme $10 makes more sense for the service as it's still a good value at that price and allows the service to remain ad-free. Similar to how every musician back in the day wanted to be on iTunes, every TV production on the planet and upcoming filmmaker/documentary maker wants to be on Netflix. Apple could own this and it'd solidify Apple TV's place in the living room. And if further reduce the 32 GB ATV to $99 and release an Apple branded first party gaming controller to treat gaming with the respect it deserves. So you sort living room, ATV, content and gaming over night.