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What: Shareholders of Harman International (NYSE: HAR ) , an audio device and car navigation systems manufacturer, are hitting the mute button after Apple (Nasdaq: 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' (Nasdaq: NUAN ) speech technology, Siri, to guide drivers with turn-by-turn navigation and provide them with up-to-date traffic reports. Not surprisingly, Garmin (Nasdaq: 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.
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