OE Integration Overtakes CD Player Sales

By Amy Gilroy -- TWICE, 8/6/2007

ARLINGTON, VA. — In a dramatic reorganization of the autosound market, 2007 will mark the first time that OE integration device sales surpass those of CD head units, the long time staple of car audio, said the Consumer Electronics Association (CEA).

OE integration product sales to dealers will near $1 billion, according to a new CEA report. The increases in OE integration of 37 percent this year and 36 percent next year will help lift overall aftermarket revenues in the near term, including a 4 percent gain this year as the market hits $2.7 billion in sales to retailers, CEA said.

Because autosound is shifting toward the more sophisticated OE integration products that offer "controller based" solutions instead of simple connectivity (as in an auxiliary jack), the result is to raise average selling prices. By the end of the decade, however, while OE integration will still grow as a category, its gains will not be sufficient to offset declines in traditional autosound segments and overall aftermarket sales will decline, CEA predicts.

OE integration products are defined as MP3/iPod integration units, aux-in adapters, universal controllers, FM modulators, cassette adapters and Bluetooth integration devices

Other car audio segments expected to show growth this year include mech-less (with no CD or tape mechanism) head units as well as head units with HD radio and A2DP stereo Bluetooth for music streaming.

The report also states that speaker shipments "appear under some pressure" and that satellite radio receiver sales for the aftermarket will drop by 21 percent this year.