February 18, 2020
Automakers already incorporate or are developing technologies
Automakers already incorporate or are developing technologies to enhance safety
and provide better smartphone connectivity and entertainment systems, creating
an opening for tech companies to break into a market for software, services and
components that is worth around $500 billion, ABI Research analyst Dominique
Bonte said.Samsung Display has also cited the auto industry as a potential
growth area and has been testing its organic light-emitting diode (OLED)
displays with BMW and auto parts maker Continental. 6 electric car battery
maker, counting BMW, Chrysler and Volkswagen among its clients.
They haven&motorcycle batteries manufacturers039;t
yet landed significant business, and Samsung Group declined to comment on
strategy, but the lure is obvious.Consulting firm McKinsey said in a 2014 report
that revenue from hardware, software and services for connectivity-enabled cars
could grow to 180 billion euros ($200 billion) by 2020 from an estimated 30
billion euros in 2014.The analysis did not include filings made after 2013 due
to a lag between filing and publication.Cross-town rival LG Electronics Inc
announced a major supply agreement with General Motors in October, sending LG's
shares surging, while US chipmaker Nvidia Corp, known for graphics processors
that power games consoles and laptops, says its chips will be in more than 30
million cars in the next three to four years.Samsung patent filings show a wide
range of technologies including a drowsy-driving detection system, an alert
system for break-in attempts and a transparent display for directions and
traffic information.Samsung Electronics could still catch up by taking the
one-stop-shop approach, similar to that of LG Electronics, by working with
sister companies to combine offerings such as batteries, chips, sensors and
software such as the Tizen operating system into a single package, analysts
say.
Carmakers may spend an additional $6,500 per car when they launch fully
autonomous vehicles, the Boston Consulting Group said in a report this
year.."It's important for a supplier to be able to sell not just one single
component but provide that entire platform," he said."There are two trends: the
car becomes a connected software device, and the entire mobile and ICT ecosystem
is getting very interested in playing a part in that evolution," Bonte
said.Unlike Apple and Google, there is no clear sign yet that Samsung is
developing its own autonomous driving technology.The growth prospects are
mouthwatering.Data compiled by Thomson Reuters IP & Science shows the
world's top smartphone maker and other Samsung Group tech affiliates are ramping
up research and development for auto technology, with two-thirds of their
combined 1,804 US patent filings related to electric vehicles and electric
components for cars coming since 2010.Samsung insiders acknowledge, however,
that it may take several years before tech arms other than Samsung SDI generate
significant auto-related sales.A decade after selling its debt-laden carmaking
unit to Renault, Samsung Group in 2010 announced its second foray into the auto
industry, identifying car batteries as one of its five growth businesses.Its
Samsung SDI Co Ltd is now the world's No.1 billion in revenue.Samsung is
arriving late at a party where some of the best partners are already taken
(Representational Image) Samsung is arriving late at a party where some of the
best partners are already taken Seoul: Samsung Electronics and group companies
are trying a belated push into the business of supplying technology to
carmakers, while rivals are already sewing up lucrative deals with an industry
that is notoriously difficult to break into.That is particularly welcome as
demand for smartphones, TVs and computers slows, but Samsung is arriving late at
a party where some of the best partners are already taken.Samsung
Electro-Mechanics Co Ltd recently formed a dedicated team to sell components
such as camera modules to new auto clients and says it would consider
acquisitions to boost car-related businesses.Analysts say the supply
relationships built by SDI could be expanded by bundling parts and services from
other Samsung arms.IHS analyst Danny Kim said Samsung Group does not yet have a
unified, group-wide approach to building its supplier presence in the
industry."Samsung needs a serious commitment to drive the synergies between all
competent organisations within Samsung Group," he said. It took the better part
of a # decade for Nvidia to gain acceptance as a global supplier, while LG
worked with GM for nearly a decade before it got its supply contract for the
Chrevrolet Bolt.Product development cycles in the auto industry are far longer
than in consumer electronics, and carmakers are cautious about adding suppliers
without a track record.In the huntOther parts of the Samsung empire are now in
the hunt.ABI's Bonte said Samsung could also speed things up by acquiring
established players such as Japan's Renesas Electronics Corp, which researcher
Gartner says was the world's top auto semiconductor maker last year, with
$3.Nvidia says its autos revenue was $148 million for the first half of this
fiscal year, nearly doubling in a year
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