My Second Thoughts About the $8B Samsung Is Spending to Buy Harman

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So, it’s been almost a week and, since then, I’ve reached out to a number of former Harman execs, insiders at Harman and industry gurus that know much more than me about mergers and acquisitions — all in pursuit of finding out what Samsung is going to do with the various Harman brands.

Here’s what we all know — and can probably agree on:

Harman has some of the most valuable ProAV and HomeAV brands in the world — in total, $1.1 Billion worth. Harman did acquisitions right. Unlike when InFocus bought Proxima — one of the worst buyouts in AV-history — they kept all the brands with their own individual branding, management team and, best of all, people. Harman just tried to institute synergies between the companies. They didn’t try to rebrand them as Harman, and they didn’t take over day-to-day operations — they attempted to keep the culture of each company alive.

For the most part, this was amazingly successful.

The lone exception seems to be AMX. AMX was the #2 programmable control system company, behind Crestron, for nearly 10 years running, in ALL of AV, before being purchased by Harman. When a client talked about integrating “a XX control system” in their boardroom, meeting room or even their home, more times than not, over the past two decades, those X’s would be replaced by Crestron or AMX.

However, and truth be told, and this wasn’t Harman’s fault at the time of the purchase of AMX, AMX was falling a bit behind in launching truly innovative control systems as well as in “dumbing” down the market and launching less sophisticated control systems that were simpler to use and program — and even “configurable.” Crestron launched Pyng and Extron truly entered the programmable control system market right about the same time as the Harman purchase. So, many integrators and industry followers believe that AMX may have fallen to a third choice anyway (with or without the Harman deal).

Now, the high-end control system market landscape — in commercial AV anyway, is certainly Crestron, Extron and then AMX.

In HomeAV, there aren’t a clear top-three unless you categorize them in to programmable and configurable. Either way, AMX isn’t in the top three. But, they were clawing back — and at CEDIA this past year, they were clearly focused on that goal.

Back to the acquisition.

Samsung may have, as all the press and financial markets seem to believe, purchased Harman for their car integration technology and products, but they also have also, whether accidentally or intentionally, acquired some of the top 25 brands in AV. Of course, AMX is there, along with Crown, JBL, Soundcraft, Martin, AKG, Mark Levinson, Infinity and you might even argue that Studer or dbx belongs in there. Oh, and don’t forget about Harman itself — that name is all over cars and homes all over the world. These are top-shelf brands.

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So, herein lies the conundrum: Samsung has, historically, rebranded all their acquisitions with, well, Samsung. Sure, Samsung has huge consumer brand appeal but, certainly in the ProAV space, most would agree that nearly every Harman-owned brand has better mindshare and market respect than Samsung itslef. JBL, AMX, Crown, BSS — these are all brands that ProAV insiders would absolutely agree are stronger.

Don’t get me wrong — Samsung has the money and the creative talent to re-brand these companies with the Samsung moniker and be successful. But why not leave them alone?

As everyone in the worked who’s written about this acquisition as mentioned, Samsung bought Harman to stake a leadership claim and instant market share in the future of the car. As a byproduct, they also acquired brands stronger than them.

Why not NOT take a page from the “InFocus Buys Proxima” and the “Panasonic Buys Sanyo” playbook and NOT do what those two companies did? Why not NOT fold those brands into the Samsung name, leave the 16 stand-alone Harman ProAV and high-end HomeAV brands alone and do exactly what Harman was doing? Let them keep their culture, their separate product lines and their people.

When I first wrote — five days ago — about this acquisition, I pondered that there would be no way that Samsung would keep these brands separate and would likely fold them all in to one giant Samsung banner or, maybe even sell them off. But now I think there are some really smart people over there at both Harman and Samsung who, hopefully, will pay attention to each other and let these 15 companies keep their individual identities, products, technologies and PEOPLE. They could just keep the Harman umbrella to hold those collective $1.1 Billion companies and keep on keepin’ on.

Either way, it’s likely going to be mid-2017 before we know for sure. In the meantime, let’s hope that Samsung didn’t hire the Panasonic exec who made the decision to wipe the Sanyo name off the planet or the former president of InFocus who decided that their name was stronger than Proxima’s was.

That’s all for now.