The spectacular $8.0 billion deal, the acquisition of Harman International Industries by Samsung, was widely discussed in public during the last week. Harman is a well-known brand for sound technology and speaker systems. One of the most often asked question was what is really Samsung buying, what technologies and intellectual properties make Harman so attractive?
Samsung Electronics president Young Sohn has mentioned in his Interview to Forbes, “connected cloud, telematics, over-the-air updates and security”  are one the most attractive areas, which have influenced the decision about the acquisition. He has also noticed that Samsung has a vision of the future development of cars, which “will be much different than today” .
InTraCoM GmbH, patent valuation company from Stuttgart (Germany), has reviewed the patent portfolio of Harman in terms of patent quality and patent value over a set of years in order to find out more details about their intellectual properties (IP) and the innovation potential that can be expected. Questions were: What is the value of Harman´s patents? Investments in what technology areas were most rapidly increasing during the last years? What development in the vehicles industry can be predicted based on the innovation activities?
Having a close look at Harman´s whole patent portfolio and its value development over time – see graph below - it is seeable that the patent value has been increasing enormously and constantly since December 2010 and ends in March 2016 with €97.342.000 ($ 110.116.000).
This development reflects a huge innovation effort within this period with also strong R&D investments. But what technology fields Harman especially was focussing on? The pie chart below presents shares of the main technical areas the patents have been registed in – based on the values they have.
One of the most interestig questions within an IP analysis is: where are the most growing technical fields? This reflects an internal coporate strategy, where future growing markets are expected to be. In the Harman case, we see a strong growth within the technical fields speech analysis and speech recognition (IPC class G10L). The patent value of G10L has been rising dramatically from € 2.375.000 ($3.147.230) at the end of year 2010 to € 5.225.000 ($5.910.680) in March 2016. Can this extension give us a reason to suppose, this can be one of the key directions for the future strategy of Samsung?
The next point that is definitely worth looking at is the value of wireless communication networks patents. The chart below clearly indicates, that the patent value in this area has rapidly gone up and peaked 2016 by €1.149.000 ($1.299.780). It confirms the excitement about the connected cars, that Alyssa Harvey Dawson (vice president of global intellectual property and licensing, Harman) showed in the interview for IAM last year: “The convergence of technology in the auto industry – and specifically in the connected car – is extremely exciting. We feel like we are primed at the forefront of the next generation of innovations that are happening in the area”. This chart provides evidence, that Harman has potentials on the connected car market and it was an important factor for the acquisition.
The valuation of patent portfolio shows us the scope of opportunities, which Samsung has received by buying Harman. This acquisition definitely gives Samsung extra capability to create new products and innovative solutions on the market and to also lock out competitors in a field where Samsung itself has already a huge and growing set of valuable patents (H04w 4 counting a total value of 659 m€ ($ 599 m)). In the business field of speech analysis (IPC class G10L) the Harman patents are indeed enrichment – here SAMSUNG had no own patents so far, as seen in the pie chart below.
Customers can be excited about the future development of Samsung’s products so let’s hope for a fruitful cooperation.
InTraCoM GmbH, Stuttgart, Germany 21.11.2016