Is the car electronics and navigation market threatened by the announcement that Apple Inc. will offer voice activated real-time traffic updates and turn-by-turn navigation in cars? While Harman International Industries Inc. CEO Dinesh Paliwal denies this, it cannot be argued that the value of Harman’s shares declined by 9% over the two days since this report came out last Monday.
Paliwal pointed out that the car’s life cycle is for seven years while a phone could be used for just 14-18 months. He said that this is the reason why cars don’t integrate a complete phone-based application. He said that infotainment systems are typically embedded in luxury cars and these could then be linked with smartphones.
Its shares experienced a drop as investors became afraid that Apple’s entry in this market will disrupt the car electronics and navigation companies. Paliwal said that Harman would integrate the new features Apple uses in its systems but it would require a year to have them tested so that there would be no interference with any of its safety or engine software, according to Reuters. He added that during the last couple of years, Harman has been cooperating with Apple as they work together to launch the first factory-installed car infotainment system with BMW AG that incorporates the iPhone.
Apple has teamed up with many automakers, such as Audi, BMW AG, General Motors, Honda Motor Co, Mercedes and Toyota Motor Corp, to introduce its voice navigation system. He said that what Harman already supplies to BMW includes Siri integration and that Apple's voice-enabled personal assistant software is at the center of its new navigation system. The CEO doesn’t know yet what smartphone platform is used to interface with his infotainment systems since Harman will be giving support to the Android of Google Inc., Apple, Nokia, and RIM's BlackBerry.