Car Navigation Plans of Apple Shake Up Harman Stock
|   Thursday, June 28, 2012
When Apple announced on 11th June at the World Wide Developers' Conference at San Francisco that it plans to integrate Siri, its voice activated command feature, for navigation and infotainment system control in cars, Harman International Industries felt those slight tremors and was shaken up by the news.

Harman International, though, in its outward appearance, is playing it cool and has stated that it will not have an impact by Apple Inc.'s designs to provide voice-activated traffic updates in real time and to manage turn-by-turn navigation support in cars.
Harman managers feel that Siri may not last the full life cycle of a car and they are hopeful that the car manufacturers would not be able to integrate a full phone-based application feature in their cars on a long term basis.

Since the announcement was made by Apple last Monday, the shares of Harman International Industries dropped by ten per cent in their value over these past couple of days. The investors are afraid that Apple's coordination with the car manufacturers to integrate Siri may badly dent the presence of Harman International in the electronics and navigation segment for the cars.

Harman International Industries are well known as suppliers of audio systems for the car industry. They also make navigational devices for luxury car manufacturers like Mercedes Benz and Audi. Shares of other manufacturers of car navigational systems like Garmin Inc. also fell sharply in these past three days.

Meanwhile, Apple is busy working out its strategies to make it simple for drivers to get their directions by the push of a button on the steering wheel through Siri and the `Eyes Free' feature. Siri is going to be the nucleus for the `Eyes Free' feature within a year from now. Apple is confident that it will be able to integrate Siri and mapping functions into the cars.

The Dutch car navigation systems supplier, TomTom, is going to gain from this news as it has recently gone into a contract to licence the maps to Apple. Car manufacturers like Toyota, BMW, Chrysler, Jaguar, Honda and Mercedes Benz are already working out plans with Apple to get the voice navigational system introduced in their cars.

At the beginning of this year, Harman International Industries was the biggest supplier of factory-installed car navigational devices. Many providers of the navigation technology for cars are already thinking in terms of reducing prices in the future.

Harman International Industries cater mostly to the luxury car segment and luxury cars will always need the infotainment devices embedded into them. The pairing with smartphones is an option that is being looked into now by Harman International. Harman think tank is busy working out a plan towards integrating similar kinds of features along the line of which were announced by Apple. Harman is trying to work with Apple instead of competing.

It is trying to launch its infotainment system that would integrate Siri and then supply it to car giants like BMW. This plan is in the pipeline. It may take over a year to get the products ratified so that the systems do not clash with the car safety standards or the engine related software equipment. Harman International Industries is likely to keep the door open also for Google's Android systems besides working with Apple. Harman International is currently a rival to suppliers like Bose, Sony, Denso and Panasonic.

It is very likely that the luxury cars will have high standards of embedded technology while the budget cars may end up with a higher share of smartphones integrated into them with various combinations.
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