Privately held Canadian RTOS house QNX Software Systems is going to multibillion-dollar-a-year Harman International Industries Inc, the Washington, DC-based outfit best known for its high-end audio and stereo brands, for $138 million.

QNX will become a freestanding Harman subsidiary run by current management including its CEO Dan Dodge, who co-founded the company in 1980.

QNX expects the deal - and the new resources it brings - to boost the use of its flagship Neutrino embedded operating system particularly in the automotive sector where its new parent's Harman Becker unit has symbiotic interests in such things as real-time navigation systems and other newfangled telematics.

Actually QNX wants to be the de facto standard and it's up against Microsoft, which is bearing down on the automotive market hence QNX' need for deeper pockets.

QNX is also up against other competitors like Wind River, Linux and the old-style roll-your-own embedded system depending on the market - aside from automotive its other main market is networking - and it intends to continue servicing its interests in networking, medical instrumentation and industrial control.

The 24-year-old company's customers, some of whom are Harman rivals, include Cisco, DaimlerChrysler, Harris, Panasonic, Siemens and General Electric.

Harman, whose growth engine has shifted to automotive and consumer electronics, already uses QNX's operating system in its infotainment software. Harman, which is also hungry to own the automotive business, says that by owning the operating system it will cut "consequential" costs and increase its system design flexibility, letting it fully integrate the OS, framework and applications.

Harman anticipates that its earnings will be impacted to the tune of approximately 5% for the next two or three years to cover the cost of the acquisition. It just closed a record quarter earning $33.7 million or 48 cents a share, up 70% year-over-year on revenues of $691.7 million, up 16%.

QNX does about $25 million a year.

QNX, an Eclipse founder, counts IBM, Intel, Motorola and Renesas as its strategic partners.