Samsung has no plans to enter the market, according to the account

A series of patent filings by South Korean conglomerate Samsung Group -- an entity which owns Samsung Electronics Comp., Ltd. (KSC:005930), the world's top smartphone producer and number two in tablet sales -- has piqued the interest of analyst at The Wall Street Journal.
I. Patent King
Ming Jeong-Lee writes:

In the patent applications published through the U.S. Patent & Trademark Office as well as the Korea Intellectual Property Rights Information Service, Samsung submitted applications for new technologies needed in making auto parts that can be used in electric vehicles. These cover technology patents for tires, motors, as well as on-board electronics for information sharing between the car and driver.

I dug up a few them with a quick search, using the terrific website Latest Patents, which compiles filings and grants from the U.S. Patent and Trademark Office (USPTO):
  • October 2013
    • 20130257321
      • "Battery System, Method for Charging Battery Modules, and Method for Balancing Battery Modules"
  • November 2013 A1 (Pre-grant publication)
    • 20130302652
      • "Method for Operating a Battery System, Battery System and Motor Vehicle"
    • 20130300126
      • "Range Extender, Drive and Motor Vehicle "
Samsung range extender
This Samsung patent application for an EV range extender was filed in May and published last month.
[Image Source: USPTO via Latest Patents]

What remains to be seen is whether it will look to enter the electrified vehicle market or simply look to sue companies seeking licensing fees.  After being punished in court by Apple, Inc. (AAPL) regarding smartphone and tablet lawsuits, the latter remains a possibility.

Samsung truck
Samsung reportedly wants to play an increased role in electrified vehicle market. [Image Source: RHiNO NEAL / / CC BY-NC-ND]

Apple, for example, only began to sue other large corporations in the smartphone space after it was sued by Finland's Nokia Oyj. (HEX:NOK1V) in 2009, a case it eventually surrendering a favorable settlement to Nokia in 2011.   Nokia no longer is building smartphones, but it still plans to sue emerging OEMs unless they agree to pay it lucrative licensing fees.  In fact Samsung recently agreed to terms with Nokia.

Such a license-or-sue strategy would be controversial and could bring the mess that is the smartphone wars to the auto industry; on the flip side it could also help Samsung score licensing profit.

Samsung holodisplay
Samsung holds a lot of patents.

However, it's probably somewhat more likely that Samsung is at least considering building an international electrified vehicle brand.  It already has mastered the art of many gadgets.  Its display and processor technology could greatly enhance and modernize an electrified car, if properly applied.  Its in-house Samsung SDI Comp., Ltd. (KSC:006400)  -- a top battery supplier -- could offer the lithium-ion cells for its gadgets, would also help it build low-cost battery stacks.
The battery subsidiary has been in the news recently amid rumors that Tesla Motors Inc. (TSLA), the world's largest maker of luxury electric vehicles (EVs), might be in talks to buy batteries from it.  Tesla currently buys batteries from a division of Japan's Panasonic Corp. (TYO:6752).

Samsung EMX
Samsung EMX rear
Samsung EMX
The EMX, an electrified concept vehicle from Renault Samsung Motors. [Image Source: Samsung]

Comments Jae H. Lee, an analyst with Daiwa Securities, "Should the world enter an era of electric vehicles, the borderlines between auto makers and electronics companies will be blurred."

Like Ford Motor Comp.'s future-tech work, a couple of the Samsung patents focus on in-car monitoring health devices and variable driving profiles based on health (e.g. eyesight, etc.), which is expected to be a key upcoming in-car electronics push.  The patent explains how to yield "optimized driving conditions by controlling the vehicle based on a driver’s private medical information".

Ford Motors
Ford Motor Comp. is also looking at in-car health monitoring and flexible driving profiles.
[Image Source: Jason Mick/DailyTech]

Samsung Electronics said at an analyst shareholder meeting in November that expanding its global intellectual property footprint, particularly in the U.S. -- where it is viewed as vulnerable -- is a top priority.
II. Samsung Motors and Its Migration Away From Samsung
Samsung chairman Lee Kun-Hee, who oversees Samsung Electronics, Samsung Electrics, and other units in the conglomerate has long wanted a strong international auto brand.  Professor Peter Wad of the Copenhagen Business School's Department of Intercultural Communication and Management is quoted in a 2002 book by Edmund Gómez as saying that in the 1990s Samsung first considered buying Kia, which was eventually purchased by Hyundai Motor Comp. (KSC:005380).
In 1994, it founded Samsung Motors Comp., Ltd. (SMI), which drew from its Samsung Electronics unit.  In 1996, Samsung added a second automotive unit, Samsung Commercial Vehicles Comp., Ltd.  The new firm was based out of Daegu, South Korea, and drew upon Samsung Heavy Industries Comp., Ltd. (KSC:010140).  It made use of diesel engines from a subsidiary of Japanese automaker Nissan Motor Comp., Ltd. (TYO:7201).

Renault Samsung
Since its inception, most of Samsung Motors' (and later Renault Samsung Motors') production has been at the Busan plant in South Korea. [Image Source: Wikimedia Commons]

But by just after SMI began to roll out its first cars in 1998, the Asian financial crisis (which began elsewhere as early as July 1997) hit.  Financially compelled to abandon the project, Samsung began hunting for a buyer, eventually settling on French automaker Renault S.A. (EPA:RNO), which purchased a 70 percent stake in Sept. 2000 for $560M USD.

Samsung SM5
The Samsung Motors (SM) '5' (SM5) was Samsung's only car sold under its sole subsidiary.  After two years Renault Samsung Motors was born and continued producing the SM5, rebranding it outside of Asia. [Image Source: Wikimedia Commons]

Just before that deal, Renault also had leveraged the crisis to form a favorable alliance with Nissan, which it bought a 43.4 percent stake in, with Nissan receiving 15 percent of Renault's shares in exchange.  Renault leaned on Nissan to provide its new South Korean subsidiary engines and other expertise.

That same year (2000), Samsung was forced to fold Samsung Commercial Vehicles into bankruptcy and liquidation.  Renault grew the newly formed Renault Samsung Motors into a global brand developing the SM3 compact, SM5 mid-size sedan, and SM7 large sedan into a global brand.  In 2005 it purchased an addition 10 percent of the company, leaving Samsung Card Comp., Ltd. (KSC:029780) (the subsidiary of Samsung that still holds a stake in the resulting company; also South Korea's largest credit card firm) with a 19.9 percent stake.

Renault now controls just a hair over four-fifths of Renault Samsung Motors.
[Image Source: Auto Evolution]

The joint subsidiary operates under the name Renault Samsung Motors.  In Asia, and a handful of other regions like Chile where the Samsung brand was well known, the full name is used.  Elsewhere the vehicles are rebranded as Renaults.
Renault Samsung Motors in 2007 introduced the QM5 and QM7 crossover SUVs, and this year introduced a smaller variant, the QM3. 
III. Renault and Samsung -- Parting Ways in Lieu of a New Samsung Auto Bid?
There are signs that Samsung is tiring of playing minority shareholder to a small automotive brand.  Some believe that Chairman Lee Kun-Hee -- still on top after all these years -- has returned to his old dream and is working to cut ties with Renault.

Samsung Group Chairman
Have a successful global auto brand remains an unrealized dream for Samsung Group chairman Lee Kun-Hee, one of his nation's most powerful figures. [Image Source: AP]

Last month Renault Samsung Motors announced a fresh alliance with Japanese automaker Mitsubishi Motors Corp. (TYO:7211).  While not involving any ownership stakes, the tie up with allow Renault Samsung Motors to sell in North America its eldest SM5 model, under a Mitsubishi branded nameplate and Mitsubishi's affiliate dealers.

In 2020 Renault will be forced to dump the "Samsung" from its Renault Samsung Motors name, despite the fact that Samsung has not announced plans to divest itself from its minority stake.

Renault Samsung SM5
Under a new deal with Mitsubishi, Renault Samsung Motors will sell SM5s as rebranded Mitsubishis in the U.S. [Image Source: Wikimedia Commons]

However, many experts believe that the greatly recovered Samsung is back at it again, planning a challenger to it's own subsidiary.  Such a subsidiary would benefit greatly from Samsung's rising brand image in the global market.

Samsung is currently ranked the world's eight or ninth most valuable brand, ahead of any other automaker.  Interbrand ranks Japan's Toyota Motor Comp. (TYO:7203) in 2013 in tenth place, two spots behind Samsung.  Forbes offered a slightly different taking estimating Bayerische Motoren Werke AG (ETR:BMW) as the most valuable traditional automaker in tenth place -- a spot behind Samsung (BMW was in 12th place in Interbrand's rankings, Toyota was in 14th place in Forbes' rankings).

The chaebol (Korean business conglomerate) has all the pieces in its various sub-companies to produce a car, except perhaps the engine.  However, if Samsung went the pure electric route it could eschew more complicated internal combustion engines for a pure electric engine, something its various subsidiaries do have experience in.

Sources: WSJ, Latest Patents (Samsung subsection)

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