Harman Kardon 2014 Annual Report Download - page 3

and Daimler. As cars become more connected,
voice control becomes increasingly important
as a way for drivers to safely interact with
embedded in-vehicle systems. To sum up 2014
Car Audio, we delivered all-time high sales,
brought in nearly $1 billion in new car audio
orders and achieved a car audio backlog of
awarded business of $4.3 billion, a company
record. Our technologies and brands enabled us
to provide differentiated and unique offerings to
the automakers, and we intend to continue our
winning streak beyond luxury and into the mid-
level and entry markets.
The growth in our award-winning Home and
Multimedia business was primarily due to higher
sales from new products launched early in the
year. We earned a record number 57 product and
innovation awards, including eight design and
innovation awards at the Consumer Electronics
Show in January. Throughout the year, we intro-
duced several new headphones and portable
wireless products. Through a partnership with
Softbank in Asia, HARMAN sold 1.4 million
ONYXTM Studio speakers, making it the third
HARMAN product to exceed the one million
unit mark.
Professional
The Professional Division continued to experience
robust demand for audio and lighting products for
use at a wide range of live entertainment events
and fixed-venue installations worldwide. Revenue
in HARMAN’s Professional Division was up 27%
in fiscal year 2014 compared to the prior year.
This increase was driven by strong demand for
our audio products and expansion into lighting.
HARMAN’s technologies were showcased at
many events, festivals and tours from Rock in Rio,
the world’s largest music festival, to our
13th Super Bowl to eight of the 12 FIFA World
Cup competition stadiums.
Throughout the year, we secured high profile
new business wins, including the BMW World
Customer Center in Germany; the Grand Mosque
in Saudi Arabia; the Marassi Civic Center in
Egypt; and the St. Louis Cardinals and San Diego
Padres baseball parks in the U.S. We also made
inroads into the transportation sector with
awards from the San Francisco Municipal Public
Transit System in California and the Salvador
International Airport in Brazil.
True performers, the HARMAN Professional
Division team ended the year on a high note with
a total 145 new products launches and several
top industry honors for our products, making 2014
a breakout year for this business.
Five Strategic Pillars
HARMAN’s five strategic pillars provide a
framework to build a stronger, sustainable
HARMAN that can adapt and succeed for years
to come. In fiscal year 2014, we made tremen-
dous strides against these endeavors.
Extend Technology Leadership
In Infotainment, we introduced our next genera-
tion scalable infotainment system that addresses
market demands for safety, cyber security and
rapid application development, which can only be
provided through in-car embedded solutions.
We also began to roll-out Clari-Fi,TM our proprietary
software solution that intelligently analyzes and
restores the audio quality of compressed and
streaming music sources. Clari-Fi has already been
launched in our JBL® Authentics product line, the
Lexus NX with the premium Mark Levinson sound
system and smartphones by HTC and Sharp.
Software such as Clari-Fi is becoming an
increasingly important component of our business
across all divisions, and we are stepping up our
investments in this area to provide our customers
with superior audio and greater connectivity.
We continue to protect these innovations with
a strong Intellectual Property strategy. Our
patent count has increased significantly again
this year from approximately 4,900 to more
than 5,650 with many of those attributed to
software developments.
Capitalize on Iconic Brands
Throughout the year, HARMAN accelerated our
brand awareness programs, and we are realizing
an immediate payback through increased sales
and traffic to our e-commerce sites. Highlights
include a new partnership with GRAMMY®
Award-winning alternative rock band Linkin Park
and our Infinity brand and a bold promotion in the
U.S. with JBL brand ambassadors Maroon 5 and
Sprint that culminated in a private concert for
consumers in New York City.
In Europe, JBL and Media Markt, one of Europe’s
largest electronics retailers, ran a successful
football promotion featuring professional
players in Germany and the Netherlands. In
North America, we received outstanding visibility
in a co-branded BMW commercial prominently
featuring the Harman Kardon audio system and in
broadcast and print advertisements for the Sprint
HTC One M8 Harman Kardon edition smartphone.
We also took steps to infuse HARMAN brands
into relevant cultural events such as Coachella,
SXSW Conference and the 55th annual
GRAMMY Awards.
2014 Board of Directors
Dinesh C. Paliwal
Chairman, President and
Chief Executive Officer
Ann McLaughlin Korologos
Chairman, Rand Corporation
Board of Trustees
Lead Director and Chair, Nominating
and Governance Committee
Edward H. Meyer
President, Grey Global Group
Chair, Compensation and
Option Committee
Kenneth M. Reiss
Former Managing Partner,
Ernst & Young
Chair, Audit Committee
Adriane M. Brown
President and Chief Operating Officer,
Intellectual Ventures
John W. Diercksen
Former Executive Vice President,
Verizon Communications
Dr. Jiren Liu
Chairman and CEO, Neusoft Corporation
Hellene Runtagh
Former President and CEO,
Berwind Group
Frank Sklarsky
Executive Vice President
and Chief Financial Officer,
PPG Industries, Inc.
Gary Steel
Former member of the Group Executive
Committee, ABB Ltd.