Harman Bets on In-Car Infotainment Upgrade

Harman Bets on In-Car Infotainment Upgrade
In-car infotainmet provider Harman today announced it will launch “HARMAN Infotainment Services“, a high margin business made of in-dash head unit upgrade that is expected to reach $500 million within five years from aproximatly $100 million today

The company want to “leverage the installed base of over 15 million HARMAN infotainment-equipped vehicles on the road today to create a fast growing, recurring revenue stream with high margins.“

According to Harman: “OEMs and car owners are seeking to keep their vehicle infotainment systems current and connected. HARMAN Infotainment Services will offer 4G/LTE connected head-unit upgrades for vehicles currently on the road; cloud-based services to the car (such as Aha by HARMAN); and customer relationship management (CRM) services for automakers using vehicle-specific aggregated data.“

“The launch of our Infotainment Services business will create a new revenue stream less dependent on automotive production cycles and drive consistent revenue with two to three times higher margins than the current Infotainment systems business,” added Dinesh Paliwal, the CEO of Harman.

This goal comes at a time when Harman announced disappointing results for the last quarter of 2012. Net sales for the second quarter (FY 2013) were $1.056 billion, a decrease of 6 percent compared to the same period last year. In local currency, net sales decreased by 4 percent compared to the same period last year. Diluted earnings per share went down 31% from $0.83 to $0.59.

These results were said to be primarily due to the economic slow down in Europe, which significantly impacted automotive production. Sales in the Professional Division were similarly affected by the recession in Europe, as well as by capital project delays during the quarter pending the outcome of presidential elections in the USA and China.

Thursday, January 31st 2013

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