Samsung eyes driverless cars as part of its strategy to leverage information technology for future growth. Samsung’s bold strategy to enter the battle over self-driving cars lead Samsung Electronics to set up a new business unit focused on automotive-related technology such as components.
Details about the strategy are scarce but Samsung will establish a new team for developing next-generation auto parts. The new team will be separate from the company’s existing three business units and will focus on making components used in self-driving and Internet-connected cars. Samsung did not say how big the team would be.
Samsung’s Bold Strategy To Bolster Sagging Profits
The news comes as Samsung looks to find new growth drivers amid slowing smartphone sales. Samsung Group, which is preparing for a power transfer to heir-apparent Lee Jae-Yong from his ailing father Lee Kun-hee, has been speeding up efforts this year to restructure its more-than 60 affiliates to streamline business areas to find a new profit driver. Samsung is betting on the automotive market to drive growth and profit.
Samsung’s Bold Strategy Directly Competes With Smartphone Rival Apple
Competition will be stiff as an increasing number of technology companies jump into the automotive space. South Korean rival LG Electronics earlier this year announced that it would be providing key components for General Motors’ upcoming electric car, the Chevrolet Bolt EV. And Google is testing driverless cars while speculation is rife that Apple will be entering the auto sector. South Korea’s largest automaker, Hyundai Motor Co., is considering developing its own computer chips and sensors used in so-called smart cars. The company plans to spend two trillion won ($1.7 billion) on developing the vehicles and expects fully self-driving cars to be available in 2030. Furthermore, Hyundai is purported to become the first carmaker to use software from rivals Google or Apple.
The announcement comes at a time when the company is not doing so well, suffering from slower growth rates in its key mobile unit. One has to wonder if branching into competitive automotive market will keep things afloat in the long run.