Harman Kardon 2011 Annual Report Download - page 29

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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. In the car after-market category we compete against speaker/amplifier brands such
as Rockford Fosgate, Polk Audio and MTX and full range brands such as Alpine, Kenwood, Pioneer and Sony.
The market for professional sound systems is highly competitive. We believe that we have historically held
a leading market position in the professional loudspeaker market and have complemented our professional
loudspeaker line by adding digital professional electronic products and broadcast and recording equipment. We
compete by utilizing our ability to provide systems solutions to meet the complete audio requirements of our
professional customers. With our HiQnet networking protocol software, our professional brand products can
communicate and operate together. We offer products for most professional audio applications.
Our principal competitors in the sound reinforcement market include Telex, Electro Voice, Mackie, QSC,
Meyer Sound Laboratories, Sennheiser, Peavey, Shure, Audio Technica, and Yamaha. Principal competitors in
the recording and broadcast markets include Yamaha, Sennheiser, Loud Technologies, Inc., Lawo, Harris
Corporation, DigiDesign/M-Audio, Genelec, KRK, TC Electronics, Stagetec and Sony. In the music instrument
market, competitors for our products include Yamaha, Peavey, QSC, Shure, Sennheiser, Line 6, Dunlop, Zoom,
Audio Technica and Roland. We also compete in the industrial and architectural sound market. Competitors
within this market include Siemens, Peavey and Tannoy.
Environmental Regulation
We are subject to various Federal, state, local and international environmental laws and regulations,
including those governing the use, discharge and disposal of hazardous materials and, increasingly, the recycling
of our products and their packaging.
In Europe, we are subject to the European Union’s (“EU”) Directive on the Restriction of Use of Certain
Hazardous Substances in Electrical and Electronics Equipment (“EU RoHS”). This directive restricts the
placement into the EU market of electrical and electronic equipment containing certain hazardous materials,
including lead, mercury, cadmium and chromium. We are also subject to the EU’s Waste Electrical and
Electronic Equipment Directive, which regulates the collection, recovery and recycling of waste from certain
electronic products.
The EU has also enacted the Registration, Evaluation, Authorization and Restriction of Chemicals
(“REACH”) regulation. REACH requires manufacturers and importers of articles to register the substances
contained in the articles if the substances are intended to be released under normal or reasonably foreseeable
conditions of use. Because the substances contained in our products are not intended to be released under normal
or reasonably foreseeable conditions of use, we do not believe we or the importers of our products have an
obligation under REACH to register those substances.
Certain of our Consumer products will require submission of energy-use profiles in accordance with the EU
Energy Using Products Directive. We are modifying the design and energy-use profiles of our products to
comply with applicable laws and regulations. Additionally, the U.S. Department of Energy has promulgated a
regulation pertaining to external power supplies and compliance with the energy efficiency standards that were
established under the Energy Independence and Security Act of 2007. We will address these requirements as
necessary. Our products may also become subject to further energy efficiency requirements if and when required
under U.S. federal climate change legislation.
In China, we are subject to China’s law on Management Methods on the Control of Pollution Caused by
Electronic Information Products (“China RoHS”), which is substantially similar to the EU RoHS. The China
RoHS requires the disclosure and marking of certain substances, including lead, mercury, cadmium and
chromium in certain electronic products.
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