A simpler, more focused Harman International Industries (NYSE: HAR) is going from strength to strength.

The audio and entertainment specialist sold the QNX operating system to Research In Motion (Nasdaq: RIMM) last spring and proceeded to hunker down on its core operations with a rejuvenated balance sheet at its back. That move is paying off today.

Harman just reported a stellar second quarter, sending the stock price skyward by more than 13%. Sales grew just 3% year-over-year to $956 million, but tight cost controls and the aforementioned simplification of Harman's operations led to nearly four times the GAAP earnings, at $0.74 per share.

The company is whipping up an R&D and manufacturing site in northern China in order to fuel pan-Asian expansion. That's just one of many projects aimed at putting Harman infotainment systems in more cars over the next few years.

At the Consumer Electronics Show in January, Harman unveiled a 4G data-streaming solution for in-car radio and social media presentation in a partnership with Sierra Wireless (Nasdaq: SWIR). The company is winning supplier awards from Volkswagen and describes Toyota Motor (NYSE: TM) as a "long-term partner." Harman has it going on in the automotive space.

That push could make Harman a significant threat to Sirius XM (Nasdaq: SIRI) as the company puts Internet-based premium radio at the fingertips of millions of drivers. Then again, Harman has a history of making its audio systems compatible with satellite radio, perhaps paving the way to a fruitful partnership rather than outright competition. Carmakers would be smart to give customers both options right out of the lot, leaving it to the usual market forces to decide a winner in the satellite-versus-Internet radio rivalry.

Add Harman to your Foolish watchlist and follow the company's travails in China, in-car entertainment, and beyond.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.