Samsung’s $8 billion Harman purchase will be seen as an Apple blunder decades from now or something

“Samsung’s purchase of Harman is strategically sound, worth the $8 billion, and positions Samsung well in the connected car market,” Larry Dignan reports for ZDNet. “The deal makes so much sense you have to wonder why Apple didn’t buy Harman.”

“There has been an argument floated for months if not years that Apple should use some of its cash to acquire Harman. The crux of the case, outlined by Jim Cramer repeatedly, is that Apple could diversify and become the hub of the connected car,” Dignan reports. “Not surprisingly, Samsung basically took the same argument Apple would use for purchasing Harman and adopted it.”

“What’s telling in all of Samsung’s comments and slides about the Harman purchase is that you could easily do a global search and replace with the word “Apple” and the strategy makes sense,” Dignan reports. “Assuming Samsung doesn’t completely botch the Harman purchase, Apple may regret not beating its rival to the punch.”

Read more in the full article here.

MacDailyNews Take: Larry, don’t you “worry,” Apple will be just fine, thanks.

Apple doesn’t need Harmon to get where they’re going (or they’d own Harmon already).

SEE ALSO:
Samsung buys automotive electronics-maker Harman for $8 billion to take on Apple, Google – November 14, 2016
Apple said to develop car operating system in Canada – October 25, 2016
Apple scales back ‘Project Titan,’ effort no longer includes building own car – October 17, 2016
Apple’s Bob Mansfield reboots Apple Car project, lays off several dozen employees – September 10, 2016
South Korea company’s never-before-revealed battery technology expected to be Apple Car’s ‘secret weapon’ – August 9, 2016
Apple Car: Everything we know about Apple’s mysterious ‘Project Titan’ – July 29, 2016
Apple Car: An operating system licensed to other auto-makers? – July 29, 2016
Apple hires founder of QNX with Apple Car project increasing focus on self-driving software – July 28, 2016
Apple taps Bob Mansfield to oversee Apple Car project – July 25, 2016

31 Comments

    1. Having bought many products from AKG, Studer, Lexicon and Soundcraft prior to them being taken over by Harman and then seeing how they changed for the worse afterwards, I have my doubts about whether Harman is still responsible for the finest audio gear. The group appears to make money, but many of the products are not a patch on what they used to be.

    2. Harman has made some fine gear, like the high-end Citation line of old, and today’s very pricey Lexicon. But most of its consumer goods today lack a design or quality edge over its competitors. After having owned and sold two H/K Citation preamps and one H/K receiver, my last remaining Harman kit is a Citation 19 power amp from 1978.

  1. That $8B would make the Beats purchase look like a supreme deal. Oh, but actually it was. I know a lot of people here think the Beats acquisition was a bad investment. But they’re judging that on their musical taste, which no longer reflects the mainstream youth market for music. Sad by true guys so deal with it. The times they are a-changin’.

    Harmon offers nothing that Apple cannot replicate itself for a fraction of the price. That this ZDNet buffoon thinks that they do just tells me that he shouldn’t quit his day job to become a strategic investor.

    1. “Harmon offers nothing that Apple cannot replicate itself for a fraction of the price. ”

      So completely and totally untrue. You have no idea what is required to enter those businesses. It’s not just money unless you do what Samsung did and buy the company. Apple could not come close to replicating what $8 billion just bought. On top of a much bigger capital investment (which Apple could easily afford), the relationships and market position can’t be bought and as it has clearly been shown already, the auto industry is not the slightest bit intimidated by Apple.

      You want a buffoon? Look in the mirror.

        1. Aren’t just oh so witty. As is typical of you, you on’t rebut what I said. You just make a remark that helps you feel superior. I get it Petey. When person has an ego like yours, it’s critical to grab on to any shred of self respect your little claws can sink into. You can’t challenge based on facts or critical thinking so you go for your mouth. You’re 0 for 3. Keep trying if you want. You’ll keep losing. Unlike you, I don’t tailor my comments to play to the crowd. I’m willing to engage in debate and exchange ideas. Pay attention and you could learn what credibility is.

      1. michaele11111’s post likely contains a lot of truth. In the business world, things always look a lot simpler from a superficial, external perspective, especially when a person has relatively little experience in that business. I am not saying that Harman was worth $8B or that Apple should have acquired Harman when it had the chance. Those who are familiar with my posts on this forum know that I am not a fan of major acquisitions – they generally do not turn out well. But Samsung will gain some tangible benefits from this deal and it is foolish to think that Apple can simply snap its fingers and quickly recreate Harman for itself. It will take significant time and money to do it the Apple way, should Apple choose to take that path. And that is just fine with me. Do it right or don’t do it at all.

    2. It is a 100% sure thing that Apple looked at Harman In depth and decided not to acquire them. If you look at the profitability of the Harman it is not something to write home about – Harman’s net income percentage has been 4.3%, 5.5% and 5.2% for the last three years. Sometimes it is better to start over from scratch instead of trying to make a poorly performing company profitable.

      2014-06 2015-06 2016-06
      Revenue USD Mil 5,348 6,155 6,912
      Net Income USD Mil 235 343 362

      1. Harman is far from a poorly performing company. Try taking a look at their net cash flow, operating margins, EBIT and return on equity. Then take a look at non-cash charges, debt service and other factors that reduce reported net income. Additionally compare their numbers to companies in similar industries. While analysts are quite full of you know what when comes to a company’s relationship with its stock price, they are often quite good at analyzing operations and market position. No one seems to agree with your assessment of Harman’s operations.

        1. Regarding: “take a look at non-cash charges, debt service and other factors that reduce reported net income”
          Since when did we ignore business expenses to value a company. Why don’t we just ignore cost of goods sold as well. Harman’s revenue is tiny and its net income is minuscule.

          Regarding: “one seems to agree with your assessment of Harman’s operations”
          Look at the votes on both or our posts and get back to me.

    1. Playing to the audience Petey? Getting enough accolades for you? Having your circle jerk?

      Samsung’s purchase is an excellent business move. It makes perfect sense and Apple blew it big time. Whether or not Samsung screws it up is another story. Many, many acquisition are failures because the acquirer tries to change what they have bought to fit their existing structure and culture. That may happen here. Time will tell.

        1. You can’t even come up an original sarcastic remark “Petey”. I’ve never owned a phone that didn’t run iOS nor have I ever had a computer that didn’t run on Mac OS or OS X.

          Care to try again? You just can’t stand rational analysis or someone who is willing to be critical of Apple – the object of your groupie like fascination. You should learn to not get your emotional love affair in the way of business.

            1. No, you are just incredibly unpopular all on your loathsome lonesome. I wonder why? You’re so nice and accommodating, civil and non-judgmental. Oh wait, not. I’m not going to debate a humorless thinks-he-knows-it-all a-hole. You come on here with the insults and usual sociopathic troll BS right off the bat. What an unpleasant little piece of work you are.

          1. Haha.
            I visit lots of forums and this one is renowned for being a circle jerker haven michaele11111.
            They put, “or something…” in the title of any article they disagree with, and publish ANYTHING to do with Samsung because they know the wankers will flock to it.

            When I say ‘flock’ I mean trickle. Most other sites have many more participants and they are far, far broader in experience and more intelligent to boot.

            After months on 9-5Mac it’s really kinda sad to come back here and to find the same dumb people blathering the same dumb crap.

            Oooh, please don’t one star me….My self esteem…..

            1. Frank here is renowned for being this site’s troll. Not much to brag about there Frank. You have hardly been an exemplary example of intelligence. Far from it. Your shameless type doesn’t HAVE any self-esteem. Stay at 9-5 Mac then – PLEASE. They obviously cater to nasty troll views like yours.

      1. Fact is Harmon will need to change to thrive, there is little internal bison to do so and its brand in such matters is like an anchor around its neck. It’s management are clearly more intuitive than you in understanding that very real fact, the company has distinctly plateaued and needs new direction and investment. Better to leave it to others to take the risk, those more desperate indeed, than take that risk yourself when you can walk away with one lovely big profit and your reputation intact. As you say time will tell, and very decisively I expect. One thing is for certain had Apple bought it the cynics would have seen it distinctly negatively and as a desperate act by a company lacking ideas, but then there has always been a bi polar attitude to such matters, particularly by trolls on here.

  2. I own a decent sized JBL/Crown/DBX rig (SRX 725 tops, 728 subs, SRX 712 monitors, iTech8K amps, DriveRack 4800, etc.).

    Guess I’ll have to get a pyrotechnician’s license to continue using it 🙂

    1. I don’t see the Harman Group as being a good fit with Apple because it’s such a broadly based group, Apple tends to be more interested in highly focussed companies.

      When Apple purchased Beats, I was a bit dubious about whether it was a good idea ( and am still somewhat undecided ), but could at least see how Beats headphones were a natural partner with iPhones and there were possibilities for advancement by having closer integration using technology such as Apple’s W1 chip.

      It’s much harder to see what Apple could gain from owing AKG, a company that makes professional microphones and headphones, or Studer, a company that established it’s reputation by making some of the world’s finest reel to reel tape recorders, but now makes digital mixing consoles. Lexicon’s studio reverberation processors have in many cases been superseded by software running on Macs.

      Apple has interests in some areas that overlap with products within the Harman’s Group, but it’s not a very close match.

  3. Apple’s decision not to purchase Harman, even after its explosive growth potential was pointed out by Cramer and other experts, shows poor management and bad, deplorable use of their cash hoarding, Again, and again. Just like their purchase of the earphone company (!), planning a new “Apple Automobile” by 2020 and then dumping it a month or so ago (dumping it was the right decision for a change!!). Like Tesla CEO said, making a car is a just little more complicated than making iPhones!!

    Apple is a one trick pony and wants to stay that way until its death. Tim Cook’s lack of vision should make Apple’s end rather quickly.

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