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B&W, Harman Ink Auto OEM Deal

4/30/2008 08:49:00 AM Eastern

Washington — Bowers & Wilkins expects its audio brand to appear on more OEM autosound systems now that it signed an exclusive long-term deal under which Harman International will supply Bowers & Wilkins-branded systems to premium luxury automakers worldwide.

The deal marks the first time that Harman will market OEM sound systems under a home or aftermarket car audio brand name that it does not own, Harman VP Brad Hoffman confirmed. He declined to speculate on whether Harman would pursue other such deals.

The B&W deal covers all vehicle makers but Jaguar, which currently offers B&W-branded systems in its XF and XKR vehicles. The Jaguar sound systems are manufactured for B&W by a third party to B&W’s specs. Harman manufactures luxury-vehicle sound systems bearing such home and car audio aftermarket brands as JBL, Harman Kardon, Infinity, Lexicon and Mark Levinson, all of which are Harman-owned brands.

The licensing deal covers the B&W “brand, know how, and technologies” in the automaker OEM business, said B&W chairman/CEO Joe Atkins. “Bowers & Wilkins will collaborate with Harman on the development and implementation of its premium and super premium solutions and will be centrally involved in all stages of development, delivery and implementation of its ‘DNA,”

The deal doesn’t transfer any ownership interest in B&W to Harman, B&W said, nor does it mean Harman- and B&W-brand systems will be the same. “Bowers & Wilkins DNA — brand, technology, know how — will remain an integral part of its premium branded solutions, which will now be developed and implemented in cooperation with Harman.

The agreement will “increase the pace and scale of delivering Bowers & Wilkins branded systems to the luxury automotive market,” Atkins said. As with its Jaguar deal, he added, “it has always been our intention to focus on systems integration, performance and the branding of Bowers & Wilkins and leave the hardware development and supply to any number of tier-one companies.”

Neither company announced when the first non-Jaguar B&W systems would appear.

The time is right to tap Harman’s manufacturing plant and OEM contacts, Atkins said, because “of our increasing efforts and exposure” during the past few years and “a growing ambition by the major automotive brands to develop premium branded audio systems.”

In the automotive business, added Harman CEO Dinesh Paliwal, “Brand differentiation is increasingly desired by both OEM customers and their end users.”

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