Not All Dealers Are iPod Friendly

By Amy Gilroy On Dec 5 2005 - 8:00am

Even though sales of 12-volt iPod-connectivity devices are soaring, and consumer demand is mounting, many dealers are failing to promote iPod kits, suppliers said.

“I can call 20 retailers and the majority won't have anything to do with selling iPod accessories and connectivity devices in their store,” said Chris Dragon, mobile brand marketing director for Harman Kardon, which recently began shipping the Drive + Play iPod adapter.

Alpine said that about 50 percent of its retailers embrace the new feature but another 20 percent are not aggressively pushing it, although they are aware of its importance, and about 30 percent “definitely, for some reason, do not see this huge change,” said marketing VP Steve Witt, said

Kenwood also estimates about half its dealers are not promoting iPod connectivity.

Suppliers claim dealers must embrace the new technology because the audio market is undergoing a radical shift. It is a shift away from swapping a head unit for a newer or better one, in favor of adding one's favorite devices to the existing head unit, they said. One of those favorite devices is an iPod or MP3 player.

One in four households now owns a digital audio player, according to published reports, and 60 percent of owners want to play their iPods in the car, according to Dragon.

Research firm In-Stat, Scottsdale, Ariz., said the market for portable digital audio players will exceed 104 million by 2009, up from 27.8 million in 2004. Apple alone has sold over 28 million iPods to date with 6.5 million moving in its most recent fiscal quarter, ended Sept. 24.

With sales of car audio generally down this year — by 4.2 percent in year-to-date sales through September, according to CEA — iPod-ready head units have become a small bright spot, one that could help propel the industry if more retailers jumped on the bandwagon, said suppliers.

Kenwood said its iPod-ready head units are enjoying a 40 percent higher sell-in rate to dealers, and Alpine said its iPod-ready head units grew 15 percent this year.

But why are almost half of 12 volt specialists reluctant to promote iPod/MP3 connectivity? MERA's director Rick Mathies said some of the problem could be regional, where the reticent dealers “could be in markets that don't have folks that are actually buying iPods.” Dealers in rural and less affluent areas are “not seeing the clients come in the door with iPods. That will happen eventually — they will just be later adopters,” he said.

Mathies admits, “There will be some retailers that just can't make the leap or can't get their mind around that fact. Generally, it is not the majority.”

The House of Representatives, a manufacturer's rep based in Sudbury, Mass., which is about 20 miles outside of Boston — where iPods are prevalent — said, “You always have early adopters, even in dealers. There are a number of dealers that have not yet embraced it and may not fully comprehend the value.”

Some retailers, such as Bill McDowell, owner of Wild Bill's Electronics, Boaz, Ala., are in the process of outfitting their sound rooms to include an iPod along with adapter kits. For now, McDowell said, “I have a lot of people calling and asking about it, but they don't necessarily buy it. They probably buy it off the Internet. Then there are weeks where I get a lot of sales.”

Steve Hadaad, president of Music Systems, El Paso, Texas, estimates that 10 percent to 12 percent of the store's head unit sales are motivated by either satellite radio or iPod connectivity, which he considers “a big number.” He estimates, “it's an even split between satellite radio and iPod” motivated sales.