By Lisa Johnston
New products on display at the American International Toy Fair, held in N
TWICE asked a handful of car stereo industry members their opinions on the state of the industry.
Some of the questions put on the table include how to get the word out that consumers can play their iPod through the car stereo and how should the industry re-ignite enthusiasm among 16- to 24-year-olds?
Here is what the 12-volt experts say about some of the key challenges confronting the autosound market as we head into 2007.
TWICE: What kind of marketing is needed to reinvigorate the interest of 16- to 24-year-olds in car audio?
Larry Rougas, Pioneer: Kids are not listening to radio and not reading the newspaper. We have to go where they are: analyze and attack from a new angle. We also have to put the focus back to car audio. I'm not sure it means having the weekend sound off, but maybe a different version or something that supports NOPI or SEMA. If our accounts want to do it, we want to support it.
Reinvigorating the youth market is a big priority. The kids now are into gaming and iPod and the Internet. It will be one of our top priorities.
Steve Witt, Alpine: There's roughly 70 million of these Gen Y'ers so the market is as big as the baby boomers. It's a great opportunity. However, it's clearly evident the old ways of marketing car audio are no longer working. We have to show these consumers that car audio is evolving quickly into digital media playback … and full seamless integration with control of portable devices is critical. I can point to Alpine's share growth as testament to why this is so important to this particular demographic.
Tom Malone, Audiovox: The car audio industry needs to stop calling itself the car audio industry. Not when much of a dealer's revenue comes from multimedia, mobile video, navigation, satellite radio and, of course, OE integration products. We narrow the consumer perception of the dealer when we continue to reinforce the concept that car audio is their core business.
TWICE: Will car audio return to the pre-2002 sales volume levels?
Witt: Car audio will never return to pre-2002 levels. However the broader definition of mobile electronics, extending beyond the traditional categories of core car audio is equal to 2002 levels now. However, that definition includes things like portable navigation and OEM integration solutions. So if the point of view is when will the buffalo return, they won't. However, if it's where can we create new business in mobile electronics, there are many opportunities particularly with navigation and OEM integration.
Malone: Car audio sales will not return to pre-2002 levels. However, mobile entertainment sales that include the car audio portion of a system will continue to rise as more and more consumers recognize that the sound experience is only part of the entertainment experience in their vehicle. The big movers of 2007 will be systems that factor in a variety of entertainment solutions in one package.
TWICE: Are there great technologies in the works that will be part of mobile electronics in the future?
Witt: Yes, there are some promising technology opportunities for mobile. First would be WiMax, roughly late in 2008 and early 2009. As the U.S. infrastructure begins to build out, WiMax will change all the rules, allowing for the realization of a connected car with additional streaming content. Not just entertainment content, but also data, navigation, traffic and real time point of interest information.
Chris Cook, Aamp of America: Ultrawideband. It's at least a year or year and a half away. Right now we have Bluetooth which allows for audio transfer and control of a device. If we move to ultrawideband, we can transfer video with control of the devices and also higher bandwidth audio.
For Peripheral it is also about the introduction of our Gateway product. The implementation will allow a lot of portable and fixed products to fully integrate into the factory installed system.
TWICE: If car companies begin placing a USB jack and aux-in jack in the front of their factory radios, will that be a big blow to the aftermarket?
Cook: It's hard to read the outcome, but my belief is automakers will continue to provide options that consumers want but will never be able to achieve time-to-market advantage. It took the automakers 10 years to reach 98 percent penetration for factory-installed CD players. Are you thinking the next innovation would be shorter to be adopted and adapted? Not a chance — it took over three years for an automaker to adapt the first connected iPod experience and to date 93 out of over 600 unique automobiles have a 3.5mm audio input jack and less than that have a simple CD changer emulation iPod adaptor that provides the ability to track up and down.
Issac Goren, Sounds Good: Since the 80s the aftermarket had been attacked with OEM blows. We have learned how to service and create a need for more. Educating our customers is what will keep us alive.
TWICE: Now that OEM integration devices are available, as are lots of iPod adapters, how do we get the word out to the consumer?
Malone: Unfortunately, OE integration is far from simple as many of the solutions are vehicle specific and/or technology specific. Most of the major men's oriented publications devote full sections to reviews of complete solutions such as iPods, PMPs, satellite radio, video games and cellphones, yet speak little about products that connect these to your vehicle.
The term OE integration means little to an average consumer and these tech-savvy publications can help change that.
Goren: I believe that we do not need to spend lots of energy telling the consumer that iPod connections and OEM integration devices are available. The consumers are calling to find out what can they do to upgrade their audio system and how can they get their MP3 unit to play in the car. Instead we need to spend lots of energy educating our own industry on what is available, what cars the solutions work in and how do we install these units so that they work properly.
Cook: We hear a lot about the FM modulator, which is the easy solution. They run from $20 to $70, and each one suffers from pops and static and they sound like a bad FM station. So you have this great digital sound from the iPod that you turn into yuck. We need to get the word out that there's a better solution. Consumers want good sound and what a direct connection to the radio provides is good sound. This is what we push in all our advertising, but the retailers need to scream this message and quit pushing FM modulators and show the good, better, best solutions.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.