Tuesday, June 20, 2006
Increased growth draws aftermarket's attention to mobile electronics
The Freedonia Group forecasts that the demand for automotive entertainment systems, which includes conventional elements like CD players and radios as well as new technology like multimedia DVD players and satellite radios, will reach almost $10 billion by 2008.
"Our perspective is that we are on the cusp of a whole new range of technologies entering the auto entertainment platform," which is one reason the market is gearing up for an evolution in the next few years, says Lance Ealey, auto analyst with the Freedonia Group.
The steady growth is going to bring new players to the market, predicts Ealey. "The potential changes with these new technologies is going to draw different providers more fully into the automotive realm," says Ealey. "Obviously, the Best Buys and consumer electronics companies will remain big players" but there are sure to be more, he suspects.
Though industry leader Best Buy doesn't separate its sales by division, their mobile electronics business is healthy, according to the company. With installation bays at almost all of their 661 stores, they have 3,200 technicians and Mobile Electronics Certified Professionals (MECP).
The MECP program, which was instituted by the Consumer Electronics Association (CEA), is the only nationally recognized program that certifies mobile electronics installers and sales people on the installation techniques and capabilities of automotive information technology, entertainment, navigation and safety/security systems.
Best Buy also recently showcased two concept cars, a Hummer H2 and a Nissan Quest minivan, to demonstrate how the consumer's ideal mobile experience can be a reality with today's off-the-shelf automotive accessories. Erin MacMillan, a company spokesperson for Best Buy, says they are seeing "a lot of movement around the GPS systems, mobile video and satellite radio." Best Buy currently stocks products from manufacturers like Pioneer, Sony, Rockford Fosgate and, coming soon, Alpine Electronics.
Though more than 270 mobile electronics companies exhibited at the January 2005 International Consumer Electronics Show, including Alpine, Blaupunkt, Clarion, Delphi and iBiquity, Ealey explains that as OEMs integrate more entertainment options into the vehicle, it will become increasingly difficult for aftermarket providers to match the level of integration and sophistication that these systems bring with it, especially with higher-end vehicles.
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