Harman Kardon 2010 Annual Report Download - page 22

Part I
Item 1. Business
Our Company
We believe we are a worldwide leader in the development, manufacture and marketing of high quality, high-
fidelity audio products and electronic systems. We have developed, both internally and through a series of
strategic acquisitions, a broad range of product offerings sold under renowned brand names in our principal
markets. We also believe that we are a leader in digitally integrated infotainment systems for the automotive
industry. Our AKG®, Crown®, JBL®, Infinity®, Harman/Kardon®, Lexicon®, dbx®, BSS®, Studer®, Soundcraft®,
Mark Levinson®, Becker®and Selenium®brand names are well known worldwide for premium quality and
performance. We have built these brands by developing our engineering, manufacturing and marketing
competencies, and have employed these resources to establish our Company as a leader in the markets we serve.
Segments
We report our business on the basis of four segments. Our Automotive, Consumer and Professional
segments are based on the end-user markets we serve. Our fourth segment, Other, includes compensation, benefit
and occupancy costs for corporate employees. On June 1, 2010 we sold our QNX business, which was previously
reported in our Other segment, to a third party. The results of operations for QNX have been reclassified to
discontinued operations in all periods presented. Refer to the heading “Discontinued Operations” below and to
Note 3 – Discontinued Operations in the Notes to the Consolidated Financial Statements located in Item 8 of Part
II of this report for more information. For additional information about our segments, see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of Part II of this
report and Note 17 – Business Segment Data, in the Notes to the Consolidated Financial Statements located in
Item 8 of Part II of this report.
Automotive
Our Automotive segment designs, manufactures and markets audio, electronic and infotainment systems for
vehicle applications to be installed primarily as original equipment by automotive manufacturers. Our
infotainment systems are a combination of information and entertainment components that may include or
control GPS navigation, traffic information, voice-activated telephone and climate control, rear seat
entertainment, wireless Internet access, hard disk recording, MP3 playback and a high-end branded audio system.
We expect future infotainment systems to also integrate driver safety capabilities such as lane guidance, traffic
sign recognition, pre-crash emergency braking, adaptive cruise control and night vision. Our Automotive
products are marketed worldwide under brand names including JBL, Infinity, Mark Levinson, Harman/Kardon,
Logic 7®, Lexicon and Becker. We also have an exclusive alliance with Bowers & Wilkins to develop,
manufacture, sell and service premium audio systems under the Bowers & Wilkins brand name. Global
automotive customers for our premium audio and infotainment systems include Audi/Volkswagen, BMW,
Daimler, Chrysler, Toyota/Lexus, Hyundai, Porsche, Land Rover, PSA Peugeot Citroën and Jaguar. We also
produce a Harman/Kardon branded infotainment system for Harley-Davidson touring motorcycles. Our premium
branded audio systems are sold independently or in conjunction with our infotainment systems. Our Automotive
segment also previously marketed personal navigation devices that were primarily sold in Europe under the
Becker brand name. We exited this distribution channel following our execution of a trademark license
agreement in January 2010.
Consumer
Our Consumer segment designs, manufactures and markets a wide-range of mid- to high-end audio and
consumer electronics for home, multimedia and mobile applications. Our Consumer products feature some of the
world’s most recognized audio brands, including AKG, Harman/Kardon, Infinity, JBL, Mark Levinson and
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