Samsung Looks to Grow In-Vehicle Technologies to Drive Revenue

With smartphone sales still lagging, Samsung is creating an automotive technology team to seek new business revenue opportunities.

Samsung, In-vehicle infotainment, in-vehicle technology, autonomous cars, navigation systems. smartphones, revenue

Samsung Electronics is creating a new automotive technology development team aimed at in-vehicle entertainment, satellite navigation and autonomous driving as it tosses out a wider net in the pursuit of higher revenue and improved financial performance.

The latest Samsung business initiative will be expanded into other vehicle-related markets in the future as it gets underway and gets its footing in the marketplace, according to a Dec. 9 article by Reuters.

Samsung said in a statement that the newly created team will work outside existing divisions to grow sales of car components and with other technology divisions inside the company, the story reported.

In November, Samsung replaced its longtime handset chief, J.K. Shin, with another executive as the global smartphone leader continues to seek a strategy to get itself out of a pattern of disappointing financial quarters. The company in October reported revenue and operating profits for the third quarter of 2015 that are were up 8 percent and 37 percent, respectively, from the same period a year earlier, which was the first positive financial news for the company in quite a while.

Despite those improved quarterly numbers, Samsung's mobile unit continued to underperform as operating profit for the unit fell 13 percent to $2.1 billion (2.40 trillion KRW) from $2.4 billion (2.76 trillion KRW) in the second quarter.

The move to create the new auto team comes after repeated calls by investors and analysts for the company to find ways of offering its computer chips and displays, both of which have strong sales and markets, to automakers that continue to add technologies in their vehicles, Reuters reported.

Samsung's movements in this area are shown in recent U.S. patent filings data compiled by Thomson Reuters IP & Sciences, the story said. The global market for automotive components, software and services is worth around $500 billion.

The efforts to move into in-vehicle technologies won't happen overnight, but will take several years.

"Now that Samsung Electronics rolled up its sleeves, there needs to be a move to consolidate all the different parts into one," SK Securities analyst Kim Young-woo told Reuters.

While announcing the news, Samsung gave few specifics about how and when it will get the efforts underway. The company did not reveal a budget for the new department or how many employees will work there.

The move was actually expected for some time, according to a Dec. 9 story by Car Design News.

"Some of Samsung's divisions have already been researching and developing in-car tech, such as Samsung Electro-Mechanics and its work with automotive camera modules, drowsiness detectors and wireless in-car charging," the story reported. The company also developed the OLED curving screen on Audi's Prologue concept car in 2014 and has been supplying lithium-ion cells to BMW for the i3 and i8 cars since 2009, according to Car Design News.

The in-vehicle infotainment and navigation market has been expanding in recent years as more carmakers build more such features into their vehicles. In the last few years, smartphones have become more integrated with vehicles through Bluetooth connections, hands-off control capabilities and more.

In 2015, that has expanded even more, with the addition of wireless charging pads for smartphones, improved navigation and improved in-vehicle infotainment systems, according to an earlier eWEEK story. This year, a host of manufacturers, including Toyota, GMC and Cadillac, brought wireless charging stations, or "pads," to the dashboards or center consoles of many of their vehicles, which makes it easier for drivers and passengers to charge their compatible cell phones in their vehicles without having to plug in a maze of wires.

In-vehicle 4G LTE capabilities, which began appearing in the last couple of years, continue to spread into more vehicles, making it easier for drivers and their passengers to get wireless connectivity for their mobile devices from just about anywhere.

In-dash displays are getting larger and more intuitive, while more controls are arriving to give drivers more information, more alerts and more control over what is happening inside and around their vehicles. That's important for Samsung because of its successful display capabilities.

And in the autonomous car marketplace, Google and Apple aren't the only companies developing ideas for driverless vehicles. Mercedes-Benz and Audi are also working on such concepts, giving Samsung an opportunity to grow its business in a developing market.