CES News: Where Does The 12-Volt Market Go From Here?

By Amy Gilroy -- TWICE, December 15, 2008

NEW YORK — In the closing frenetic weeks of 2008, TWICE asked 12-volt industry members if there might be a "killer product" that would entice consumers to pull out the radios from their cars and replace them.

TWICE expected replies about sexy new Internet products. We did get some interesting Internet ideas, but several retailers said what is needed is not more technology, just more consumer awareness about existing products.

Here is what some industry members had to say on the topic:

Sterling Pratz, CEO/co-founder, Autonet Mobile: "What we have seen is a stronger need for an Internet-enabled console device that delivers three things: audio TV [the soundtrack of live-TV], Internet radio and Internet mapping. We have been working on this already and, believe it or not, listening to a TV broadcast is powerful. You can envision the person yet only hear the voice, which makes it safe and ties the broadcast more closely to the listener's emotions. This will be big with those who leave their homes in the a.m. and simply move from TV at home to audio TV in the car. The power of the Internet in the car can make this a reality in relatively short order.

People also want mapping, but I am not sure traffic updates is the killer application. I think it is interactive mapping where they can overlay services such as CitySearch, Fandango and Open Table.

Next up: Internet radio. People really have shown the need to have choice and not be limited to certain channels. We are testing this now with our Web Edition Town and Country at the San Francisco Auto Show and the response has been amazing. Nearly everyone who gets into the car falls in love with it ... Simply put, Internet in the car will drive new choices, new applications and new habits. This will also open up a new industry of companies, jobs advertisers and services that people are only beginning to play with now. After having used these applications, I almost never use my car stereo anymore. All of these could be put into any car today and would add about $700 to the cost and could come down to $499 or less.

Grant Phillips, purchasing manager, Audio Express, Scottsdale, Ariz.: I really think the industry has the technological products to have the business working just fine if the economy was doing better and we, as an industry, were really doing a better job of telling the consumers what stuff is available to them. I don't even think it's any special widget or product to drive the business. I do believe that the Ford Sync was really, truly, the first thing that was aimed at the masses that talked about technology in cars. That proved that normal people could identify with it.

For any really compelling reason [to rip out the factory radio] it's got to be either:

A) They didn't get the whole multimedia/navigation/entertainment package [when they bought the car] or

B) they want to hook up an iPod to the system.

Those are the two reasons still driving the business. Beyond that, the factory radios are getting to be pretty damn good.

As far as the Internet, I think there will be lots of talk at CES — there's a reason two of the keynote speakers are [from] Microsoft and Ford. There's going to be a lot of talk about getting the Internet into cars, but I'm telling you, I don't think you'll see the traditional guys like Pioneer, Kenwood, Alpine, Eclipse, JVC, any of them in it this year.

With the economy the way it is now, I think the Internet [product] would have to be a $500 or $600 item. I've had one store in a 40-plus store chain inquire if we're looking into Internet for the car. If there's a lot of hooplah at CES about it, it will get reported in the national media. There will be talk this year and a lot of people making it sound like it's around the corner, but … we're really a couple of years before this even starts to be in the realm of mainstream stuff.

Larry Rougas, VP marketing and product planning, Pioneer Electronics: Yes, it's possible. I'm very optimistic. This was a tough year for everybody; no ifs and or buts. But if you look at the iPhone … if you have the right product, people are going to go out and buy it. Products that give you the ability to access the Internet … everyone wants to take what they have at home on the road, whether it's their music or contact information. They want to be connected. That's the path we've always been on. The infrastructure in the U.S. has been built to where we can offer this in the car. I'm very optimistic there is product on the horizon that will be able to drive consumers to want to replace their radios in the car.

At CES, I believe you'll have a lot of manufacturers showing cool and interesting stuff that will bring the interest back, but it will take some time for this economy to recover.

Rob Elliott, executive director, In Car Experts (ICE): "I think that the $400 whiz-bang device you speak of already exists and is known as an iPhone (or equivalent). What our industry does extremely well is integration. While people love the portability of devices like the iPhone, they also love the advantages of installed devices. Things like large touchscreens, non-obscured windshields, hidden wires, robust speakerphones and true integration to the vehicle's existing electronics has great value, but one must be made aware that such integration capabilities even exist. I personally have demonstrated our industry's most advanced products to both young and old, and they all respond with a very similar statement, "Wow, I didn't know that was possible!"

Damien Stolarz, COO, StreetDeck: The [Ford] Sync goes a little in that direction but the killer app would be TomTom meets OnStar. People want to see a screen, not just voice. They want to ask their car to do things … but they want a great display on the screen like a TomTom navigation device. But it would be integrated with voice and connectivity. It's a doable aftermarket application.

Note: StreetDeck supplies software to the VizuaLogic VMOD and navigation platforms to car companies.