Harman Kardon 2008 Annual Report Download - page 25

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Competition
The audio industry is fragmented and competitive and includes numerous manufacturers offering audio
products that vary widely in price, quality and distribution methods. Consumer home, multimedia and mobile
aftermarket products are offered through audio specialty stores, discount stores, department stores, mail order
firms and Internet merchants. Automotive and computer manufacturers also offer branded audio products as
options. Music instrument retailers, national electronics retailers, audio dealers, contractors and installers
offer professional products and customers can also purchase these products on a contract bid basis. We
concentrate primarily on the higher-quality, higher-priced segments of the audio market and compete based
upon the strength of our brand names, the quality of our products, our ability to provide integrated systems
and our comprehensive marketing, engineering and manufacturing resources.
In the automotive audio market, we compete with Bose, Pioneer ASK, Foster Electric and Panasonic in the
sale of audio systems to automotive manufacturers and Alpine, Bosch, Panasonic, Continental, Visteon,
Mitsubishi Electronics, Aisin Seiki and Denso in the sale of electronics and infotainment systems to
automotive manufacturers. We compete based upon the strength of our brand names and the quality of our
products.
We believe our competitive position is enhanced by our technical expertise in designing and integrating
acoustics, navigation, speech recognition and human-machine interfaces into complete infotainment systems
uniquely adapted to the specific requirements of each automobile model.
We believe that we currently have a significant share of the consumer market for loudspeakers, primarily as a
result of the strength of our brand names and our technology. We believe JBL and Infinity are two of the
most recognized loudspeaker brands in the world. Our high-end loudspeaker brand, Revel, extends our
market position. Principal competitors in the consumer loudspeaker market include Bose, Klipsch, Polk
Audio, B&W and Boston Acoustics.
Competition in the consumer home electronics market remains intense and is dominated by large Asian
manufacturers. This market is characterized by the short life cycle of products and a need for continuous
design and development efforts. Our competitive strategy is to compete in the higher-quality segments of this
market and to continue to emphasize our ability to provide system solutions to customers, including a
combination of loudspeakers, electronics products, integrated surround sound and home theater systems. Our
principal electronic competitors include Yamaha, Sony, Denon, Onkyo, Pioneer and Marantz. We also
compete in the luxury consumer electronics market with our Mark Levinson and Lexicon brands. Our
principal competitors in this high-end market include Krell, McIntosh, Audio Research, Meridian, Linn and
Classe.
In the multimedia market, we supply Apple stores and other retailers with JBL and Harman/Kardon speaker
systems that serve Apple’s iPod and iPhone as well as other MP3 players. Our principal competitors for these
products are Bose, Altec Lansing and Klipsch. We also offer Harman/Kardon and JBL speaker systems to
personal computer retailers. In this market, our principal competitors are Creative Labs, Altec Lansing,
Logitech, Klipsch and Cyber Acoustics. Additionally, Harman/Kardon audio technology is built into certain
Toshiba laptop computers. The Harman/Kardon Drive + Play 2 mobile product provides full MP3 control and
interface for Apple’s iPod and iPhone and includes a highly visible display. Our principal competitor in the
MP3 mobile accessory market is Alpine. Our personal navigation devices range from simple navigation units