Automotive Mobile Audio Video

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.

Dealers and OEs will continue to nurture their position in this market, as they have in the past. In fact, CEA market research says that U.S. mobile video factory sales grew 62 percent in 2002. And, more vehicles are beginning to roll off the lot with DVD players and other entertainment electronics as standard or optional equipment.

For example, Cadillac, which premiered a 2005 Escalade with a TracVision low-profile satellite television system at this year's Super Bowl, offers buyers options that include a rear-seat DVD entertainment system with a seven-inch LCD screen and two sets of wireless headphones, as well as DVD-based navigation systems.

But Ealey believes this doesn't necessarily mean that sales in the aftermarket will not proliferate. "Never underestimate the ability of the aftermarket entertainment system providers to meet the challenge."

One of the goals of the Consumer Electronics Association's Mobile Electronics Division in conjunction with the Society of Automotive Engineers (SAE) and other automotive industry associations is moving forward to foster the growth of open standards of aftermarket connectivity for mobile electronics products to allow consumers the opportunity to choose the mobile electronics they want for their vehicle.

Ealey explains that obtaining repair and installation information may be a difficult process because OEMs like to have proprietary systems, and entertainment electronics aren't nearly as standard as on-board diagnostics. "If you are a provider of electronic systems, you have to be sure you can link in and not cause any liability in the system itself." Smaller installation shops may not be able to keep up, leaving most of the growth to the bigger electronics retailers.

The technology research company known as VDC expects that separate multimedia components like video sources, monitors and surround sound processors will lose market share as packaged systems make headway. A report from the company says, "Packaged systems offer more of a mass-market approach than component systems, which are typically sold through audio/video dealers that custom build systems for their customers. At this time, packaged systems are primarily factory or dealer installed, a trend that VDC believes will continue over the next five years."

But besides the standard consumer electronics stores, Ealey believes that large automotive retailers and other aftermarket distributors may begin offering more mobile electronics packages for customers. "Where there is a certain amount of flux in the industry, this is a good time for people to come into the market.

# posted by Medical Information : 2:13 AM