MERA President Shows Autosound Future At KnowledgeFest

By Staff -- TWICE, 4/9/2007

KNOXVILLE, TENN. — At the recent KnowledgeFest trade gathering, Bob Graham, president of the Mobile Enhancement Retailers Association (MERA) spoke on the future of autosound and the role of the 12-volt specialist.

As it is sure to ring home to many in the industry, the speech is presented here in truncated form. It is accompanied by a sidebar explaining some of the future technology from Hughes Telematics mentioned by Graham.

Graham: Recently I read an article in Motor Trend magazine that will give you some idea of the technological advances in telematics that are headed our way. This article is by no means a "tell all" of all the coming technologies but it gives us some insight into the very near future and a time frame.

GM will make OnStar standard across all model lines within a year. It grants them direct access to you and your buying or driving habits. Combining OnStar with satellite radio will give GM a pathway for data to flow directly into your car.

Hughes Telematics intends to take this technology to a new level and make it as affordable and common as FM radio! Hughes is gearing up to launch two new, high-powered, geo-stationary satellites that will be able to deliver targeted content to millions of vehicles nationwide and receive data coming back from the cars. The receiving and transmitting of data will be integrated into the CAN bus system in the car which will make on board hardware costs drop dramatically.

With such a system, automakers will be able to upgrade software on your car any time, automatically throughout the life of the car. When anything malfunctions, the dealer will remotely tap into your diagnostic system and order the necessary parts before you arrive for your appointment.

Navigation systems will be cheaper and their maps updated automatically. Satellite audio and video will be standard.

Hughes plans a rollout in late 2009 using existing satellites and cellular coverage and becoming fully operational on their new satellite network by 2012 to 2013.

So there you have it. Pretty interesting stuff.

New technologies such as these are threatening to put an end to changing out the head unit in cars … I can tell you, as a group we are lagging behind in fully comprehending the coming changes.

In the past we have been very successful at reinventing ourselves, but I am here to tell you that the specialist retail model is going to change over the next few years as it morphs into a different way of doing business.

Understanding that the coming changes are going to happen, with or without you, will be the first step.

The car audio market is still very vibrant even while going through a stage of flux. Many specialists are telling me that certain segments of their business are doing well. But the market has shifted. What used to be our core business, the deck and 4, is moving to the Box stores. At the same time, specialists are drifting to the high end of the market.

I don't know about you but we do not sell many $99 CD players these days. Most of our sales are higher ticket items.

It seems that most retailers are taking a "wait and see" attitude in regards to the future direction of their business.

I believe the "wait and see" attitude is a dangerous position to take.

How do I restructure for the future?

I would like to share with you a few things that I envision for the future.

In my opinion, to be successful in the specialist channel you will need to move to the high end and become the "Go To" guy in your area. A mobile enhancement specialist has to be on the cutting edge of technology. You must be the first in your market with new technologies and garner the reputation as the authority in your market.
You will need to demonstrate to the consumer how to dramatically improve his system without changing the source unit.
Diversify. I believe diversifying needs be part of your business plan. It will become increasingly risky to "stay the course" as time marches forward …You will need to discover new ways to make more profit on fewer customers or expand the products that you sell and service.

Certainly the market is different than it was four years ago. But, still this resilient economic climate has all the fundamentals in place to offer wonderful opportunities to those that have the desire to win.

Who Is Hughes Telematics?

ATLANTA — Hughes Telematics is a start-up company that plans to make common the "connected car" by selling an inexpensive "mini processor" plus satellite/cellular service to the car companies.

After-market members might think of the system as an embedded car locator/traffic transceiver/XM or Sirius receiver/advanced remote diagnostics tool/e-mail service with other entertainment possibilities.

Hughes Telematics announced its formation only last November, and then in January stated that Chrysler will be its first key customer. Hughes said its system should be available to drivers within a few years.

The Hughes telematics/infotainment system is unique because it is a complete turnkey solution for OEM manufacturers. Hughes manufactures a hard drive and processor that can connect to the car's CAN bus system and that can be embedded in the car for under $100. Hughes will initially provide cellular communication to the vehicle to offer crash notification, roadside assistance and stolen-vehicle tracking, said a spokeswoman.

In the future Hughes will add satellite capability to offer technology such as geo-fencing, remote diagnostics, remote emissions checks, traffic alerts and remote upgrades to the car's engine, said the spokeswoman. It has already contracted use of one satellite and will add use of another, she said.

When a check-engine light comes on, the Hughes system might be able to fix the problem remotely. The system could also check the car's emission levels without requiring a physical inspection. It could also both gather and transmit traffic information.

Since Hughes can determine the speed of each vehicle on its network, it can gather traffic flow information across the country and then report it back to those same vehicles. Each car becomes a traffic "probe." This is a similar concept to that planned by Dash Navigation in a new two-way cellular-based PND expected to be offered later this year. By the middle of the next decade, Hughes expects that 10 million such vehicles using its system could be on the road reporting and receiving traffic.

Hughes' parent, Apollo Management, owns a stake in Sirius and the Hughes system and is expected to incorporate programming for either or both Sirius and XM.