The automotive audio systems market in Europe is near stagnation, so OEMs and suppliers are looking at promising digital media alternatives, according to a new report from Frost & Sullivan. The alternatives include nomadic devices, Bluetooth, digital audio broadcasting (DAB), satellite radio, and hard disk drives.
The research firm estimates the car audio systems market at €1.49 billion in 2005 and predicts it will grow to €2.37 billion in 2014 based largely on growth in MP3 head units. "Consumers increasingly want to use the MP3s they burn at home inside their cars," noted Frost & Sullivan telematics and infotainment team leader N. Praveen Chandrasekhar. "MP3s are also available, physically separate from the CD, from many other sources. These factors are driving the demand for OE audio systems to offer MP3 playback capabilities--a trend that is promoting future market growth."
Chandrasekhar said consumers will typically rip an original music CD onto their home PC in WMA format and want to use that same format in their cars. “This is pushing the need for vehicle manufacturers and suppliers to offer digital compressed media playback,” he said, adding that OEMs can make revenues out of a new product." He said the cost of implementing MP3 across different vehicle platforms is declining, which “clearly proves rising interest levels in MP3."
He cautioned suppliers that “lifecycle mismatch” is an issue due to rapid technological developments such as the launch of Bluetooth advanced audio distribution profile (A2DP) for audio streaming from personal devices into vehicles.
“Being in sync with fast-evolving technologies presents a clear challenge to automakers and is becoming increasingly important because of competition from low-cost aftermarket systems,” Chandrasekhar said. “Vehicle manufacturers and tier 1 suppliers need to increase their product portfolio for audio systems. They not only have to offer different solutions such as the single CD, MP3 and even high-end DVD players, but must also ensure a wide variety of each of these.”