USA: Shares of Garmin and Harman have hit their lows for 2012 after Apple launched a feature-rich map service that includes three-dimensional renderings and turn-by-turn navigation to broaden the software’s appeal. In addition, Apple has announced plans to include its voice-recognition software, known as Siri, in automobiles to allow drivers to get information “hands-free.”
The developments represent the latest challenge to Garmin and Harman, both of which saw sales peak in fiscal 2008 before the worldwide economic slowdown and the rise of smartphones–with increasingly sophisticated GPS and mapping apps–chipped away at their top line.
According to analysts smartphones and tablets could take over the so-called auto infotainment function in vehicles, displacing the navigation-system makers.
Shares of Garmin slumped 8.6% to $38.20 Monday and hit a low of $37.82 for 2012. Likewise, Harman stock fell 5.2% to $38 and hit an intraday bottom of $37.90, near its 2012 low of $37.58.
Morgan Stanley, which initiated coverage on Harman’s stock at underweight earlier this year, noted then that smartphones and tablets already incorporate the basic hardware, software and functionality that can be found in an automotive infotainment system and can be integrated directly into the vehicle at very little additional cost to the auto maker or the customer.
One example coming to the European market later this year is the 2013 Mercedes-Benz A-Class, which Morgan Stanley said will have iPhone integration capabilities, including the ability to use Siri.