Speakers

Harman Dealers ‘Positive, Hopeful, Nervous’ about Samsung Acquisition

Harman integrators foresee influx of R&D money into Harman from Samsung, and speculate on stronger AMX integration, changes in the sales channel, and mixed reactions from some audiophile clients.

Harman Dealers ‘Positive, Hopeful, Nervous’ about Samsung Acquisition

Jason Knott · November 17, 2016

The announcement that mega-company Samsung is acquiring Harman for $8 billion took many integrators by surprise. Among a group attending the Mark Levinson Dealer Academy training in Shelton, Conn., this week, the reaction was mostly cautious optimism.

Brad Waite of The Screening Room, Colorado Springs, Colo., pragmatically notes, “Obviously time will tell what will actually happen.”

Until he gets indications to the contrary, Waite is taking the news at face value. “Based on what Samsung said in its press release, it really wanted the automotive side of Harman. One major news outlet even said, ‘Samsung Acquires Auto Parts Manufacturer,’” he says laughingly.

Brad Waite (left) and John Schuermann of The Screening Room in Colorado Springs, Colo.

John Schuermann, also of The Screening Room, thinks the sale is going to boost Harman’s R&D even more.

“It [the acquisition] is a positive thing,” he says, noting that Harman staff has told him Samsung in the recent past hired away some of Harman’s engineers so it could upgrade its audio protocols.

“So if Samsung is attracted to the solid science and engineering and story that Harman has, to the point where Samsung is already trying to pull Harman people away, then it seems like Samsung is really dedicated to supporting Harman. It seems to me that Samsung is covetous of what Harman brings in terms of engineering expertise. I might be naïve but that is what I believe,” he says. 

Waite agrees, adding, “Right now, given what Samsung says it is going to do, that integrators should not have any concerns.”

Paul Kraft of Engaged Audio Video in Lehigh Valley, Pa. 

Paul Kraft, owner of Engaged Audio Video in Lehigh Valley, Pa., is also being pragmatic.

“I would say I am hopeful on one hand and a little nervous maybe. It could represent a lot more cash on hand for the Harman audio brands for R&D. If Samsung leaves it alone, it will be fine. I went through this years ago with Madrigal. That brand was designed to be a standalone from Harman until bad stuff started happening at Madrigal. Harman finally stepped in and said, ‘No, we are not going to allow that anymore.’ Then massive changes took place there. But I doubt we would see a repeat of that scenario between Harman and Samsung.”

Sales Channel Changes?

Samsung’s track record over the past half decade is indirect support of the custom installation channel. The Korean company has not exhibited at CEDIA in years, and does not have an authorized dealer program. The company primarily supports the custom installation channel through distribution, via relationships with AVAD, WAVE and others. The Harman brands are not sold through distribution.

"Does this mean we are going to start seeing Revel speakers sold at Costco? I don't know. I doubt it."
— John Schuermann, The Screening Room

“Samsung would not have purchased Harman thinking to change the sales channel for these brands, certainly not Revel, JBL Synthesis and Mark Levinson,” says Schuermann definitively.

Schuermann, who is very active on AVS Forum, said as soon as the buyout news came out, he was getting messages from other integrators asking, “Does this mean we are going to start seeing Revel speakers sold at Costco?”

“I don’t know, but I doubt it. From everything we are hearing, no one at Harman is foreseeing any big sales channel change. Everyone seems very happy,” he says.

‘AMX Inside’ Control Ecosystem?

With Samsung making inroads with its SmartThings ecosystem there will definitely be customers who might be drawn to Samsung-owned brands like the Harman brands.

Kraft thinks that could be a good thing. “You never know if Samsung will want to integrate a control solution more deeply with the Harman brands. Maybe we will see ‘AMX Inside’ at some point,” he speculates.

Waite is unsure what the reaction is going to be among some of his audiophile clients. “I am sure we will have audiophile customers who will tell us, ‘Now that these brands are owned by Samsung, the brand names are cheapened, so I don’t want it.’”



2019 State of the Industry Special Report - CE Pro Download

The custom electronics industry saw a healthy 8 percent growth rate in 2018, down slightly from the blazing 11 percent growth in 2017 but still admiringly strong. Our 2019 State of the Industry indicates that readers expect to see even more growth in 2019. Get your copy today.




  About the Author

Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at jknott@ehpub.com

Follow Jason on social media:

Jason also participates in these groups:
LinkedIn · Google+

View Jason Knott's complete profile.



  Article Topics


Speakers · Loudspeakers · Floor/Shelf · Amplifiers · News · Business · AMX · Harman · JBL · Mark Levinson · Mergers and Acquisitions · Revel · All Topics
CE Pro Magazine

Read More Articles Like This… With A Free Subscription

CE Pro magazine is the resource you need to keep up-to-date on the latest products, techniques, designs and business practices. Subscribe today!

Subscribe Today!

Comments

Posted by Audioplus on November 18, 2016

I’d be nervous as hell if I owned Samsung stock, track record of Harman acquisitions isn’t great. Talk about AMX acquisition has been going on for a year? That/‘s atypical of Harman. No mention of DBX on this recent acquisition? After Fosgate Audionics became Citation, that name brand was abandoned within 12 months. I would understand if Sidney Harman was still alive, he would buy the name back in 2 years at 10 cents on the dollar. If you’re a Harman or JBL dealer, it’s probably a positive move.

Posted by Audioplus on November 18, 2016

I’d be nervous as hell if I owned Samsung stock, track record of Harman acquisitions isn’t great. Talk about AMX acquisition has been going on for a year? That/‘s atypical of Harman. No mention of DBX on this recent acquisition? After Fosgate Audionics became Citation, that name brand was abandoned within 12 months. I would understand if Sidney Harman was still alive, he would buy the name back in 2 years at 10 cents on the dollar. If you’re a Harman or JBL dealer, it’s probably a positive move.