Internet Radio Set To Explode: IHS

TWICE Staff -- TWICE, 8/22/2011

El Segundo, Calif. - Global sales of cars with Internet radio capability are set to rise dramatically during the next eight years, leading a wave of in-vehicle apps that will be integrated into car electronics systems in the coming years, according to the IHS iSuppli Automotive Research Service from IHS.

Sales of cars with Internet radio integrated into their head unit will rise to 24 million units in 2018, up from 168,000 in 2010, IHS said, with the U.S. leading the pack. U.S. sales are expected to grow to more than 10.9 million units in 2018, from 149,000 in 2010.

"The next several years will see an explosion in the use of in-vehicle apps in cars, driven by booming shipments of automobiles employing head units designed to integrate Cloud-based content," said Egil Juliussen, principal analyst for automotive infotainment at IHS. "These apps, whether built into cars or provided via connected mobile devices like smartphones, will provide a range of infotainment, entertainment, remote diagnostics and navigation services. With music having been the leading form of entertainment in cars for more than 75 years, Internet radio is expected to lead the in-vehicle app revolution."

According to HIS, this increase is being enabled by a fundamental shift in the way car electronics systems are being designed, with auto infotainment systems transitioning from fixed-function head units to "apps-based" head units.

Smartphone integration software is also contributing to the rise, as drivers can use their phones to operate auto-related apps.

IHS said that about 50 car models in the United States currently have Internet radio app integration or will have it in their model-year 2012 versions.

Pandora was cited as a leading influence for the rise in Internet radio, along with iHeartRadio, Slacker and Spotify. As for other Cloud-based sources of content, IHS named Apple's iCloud, Google Music and Amazon's Cloud Drive as those likely to see implementation in the car. "However, at this point in time, automotive OEMs have shown little interest in implementing this type of Cloud service in the car.  Instead, the trend is toward popular entertainment apps such as Pandora, iHeartRadio, Slacker and more," it noted.