What are connected cars and why is Samsung investing $8bn in it?

As the Internet of Things umbrella expands, new niche industries are being established. Among them is the so-called “connected technologies” marketplace which, according to technology forecasters, is expected to grow to $100bn by 2025. 

Cars, in particular, are expected to push much of this growth, with research firm Gartner predicting that by 2020, one in every five vehicles will be outfitted with some form of wireless network connection.

Rather than define the technology with some dictionary-esque explanation, it’s better to give a few examples of what this technology will be able to do for its owners. For one, connected cars will be able to assess the driver’s health as they travel. It can provide automatic leaving and arriving alerts for friends and family. And GPS navigation will also improve, with current information as it relates to traffic conditions. 

Simple services, sure, but a new frontier for the automobile industry as a whole.

Samsung has stepped forward and quite literally bought into this new industry, with the announcement that it has purchased automotive electronics-maker Harman International Industries for $8bn. The move is seen as a way for the company to make immediate in-roads into the burgeoning connected car industry.

The purchase is easily the biggest overseas transaction the South Korean firm has ever made. Samsung reps officially described automotive electronics as a “strategic priority” for the company. This point is confirmed with the company’s decision last year to create a new business division that focuses exclusively on automotive electronics; thereafter, it invested in BYD, a Chinese carmaker. 

Harman, the company Samsung is buying, is based out of Connecticut. Its products are already used in 30 million cars. 

“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,” said Young Sohn, Samsung's president and chief strategy officer, in a statement.

Via BBC