Samsung (NASDAQOTH: SSNLF)
Under Armour's Harman JBL Partnership
One of Harman's various tech sub-brands is the audio and headphone company JBL, which among other thing makes sports headphones.
Combining the two brands in a product like this has major benefits for both. For Under Armour, it's a chance to further its goal of becoming a tech-focused company, while also diversifying away from typical wearable products that are made by so many competitors. For Harman JBL, it's a chance to get access to the more than 190 million users that Under Armour has across its mobile fitness app ecosystem, while also increasing its brand name among fitness enthusiasts.
Why a partnership with Samsung could be big for Under Armour
Partnering with Harman JBL was a great way for Under Armour to break further into the tech world, but being partnered now with Samsung could have far larger benefits.
Similar to Apple (NASDAQ: AAPL) and its 2014 purchase of the audio and headphone company Beats, Samsung could use its acquisition of the Harman JBL brand to help further its own audio segment with its mobile phones. We saw with the iPhone 7 that Apple has put much more focus on eliminating cords and cables by forgoing the headphone jack. When Samsung's next generation of Galaxy and Note mobile phones come out (assuming they don't blow up) there is likely to be a similar focus on using bluetooth capabilities to eliminate cords, possibly using JBL brand headphones as an option for wireless headphones.
Another interesting aspect of this move for Under Armour is that it could help to bring its Record app further into the smartwatch industry. Similar to the way that Nike has partnered with Apple to make a
Samsung's acquisition of Harman does seem to be mostly a push into the car market that many other tech companies, including Apple, have also been vying for. Since the deal won't close until mid-2017, any ideas about other aspects of this move are all speculation. Still, the idea that Under Armour is now partnered with one of the largest tech and smartphone companies in the world is probably very good news for the sports company and its long-term shareholders.
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