Why Harman International Shares Sank
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What: Shareholders of Harman International (NYS: HAR) , an audio device and car navigation systems manufacturer, are hitting the mute button after Apple (NAS: AAPL) announced that it would be making its own car navigation system. Shares of Harman fell as much as 10% on the news.
So what: Although Harman is predominantly known for its high-end audio systems, it does make in-car navigation systems for Audi and Mercedes. Apple's announcement today could be trouble for Harman, as it plans to use its clout and Nuance Communications' (NAS: NUAN) speech technology, Siri, to guide drivers with turn-by-turn navigation and provide them with up-to-date traffic reports. Not surprisingly, Garmin (NAS: GRMN) , whose primary business is in-car navigation, is being negatively affected by Apple's announcement as well.
Now what: While today's news isn't good by any means, I don't see it as a backbreaker for Harman. The majority of Harman's revenue comes from its audio products, and there are few in the business that consistently receive such high marks for their audio products as Harman. The company that should be quaking in its boots is Garmin, which will lose even more GPS opportunities if Apple hooks up with car manufacturers prior to their hitting the lots.
Craving more input? Start by adding Harman International to your free and personalized watchlist so you can keep up on the latest news with the company.
At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Nuance Communications, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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