By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The Pioneer AVIC-N1 in-dash navigation and DVD combo player was the first smash-hit success for in-dash navigation, and one which redefined the marketplace in terms of form, function and price, according to industry members.
On the market from April 2004 to April 2005, the Pioneer AVIC-N1 ranked No. 1 in dollar sales, quickly knocking Alpine out of the top slot and winning almost half the business in its class, according to The NPD Group, Port Washington, N.Y.
Even Pioneer's competitors credit the AVIC-N1 with redefining the navigation category. At a time when many systems were priced over $3,000, the AVIC-N1 combined a flip-out monitor, DVD player and navigation into a single chassis for under $2,000. In addition, it could play a DVD and audio while navigating, furthering the budding subcategory of “audio, video, navigation,” now known as AVN.
Pioneer also backed the AVIC-N1 and the navigation category with a $12 million advertising campaign, according to marketing VP Michael Townsen.
Another key selling point of the AVIC-N1, Townsen said, was “the fact that it was built into one DIN chassis, because it made it easier for the retail salespeople to sell it and for the consumer to buy.”
Already, suppliers have taken a cue from the AVIC-N1's success and are offering AVN units at new low price points, such as the new Eclipse AVN5435 at a $1,899 suggested retail.
For Pioneer, the challenge this summer has been to build on the success of the AVIC-N1 with its new replacement model, AVIC-N2, a task which Pioneer claims has been very successful, although some retailers disagree (see story below).
Looking at the period from January through June this year, Pioneer claims the AVIC-N2 “is outselling the AVIC-N1 at a ratio of about 177 percent. When we add the AVIC-D1 [a new navigation-only version] which only started shipping in May, we're selling about 250 percent vs. last year,” said Townsen, explaining that distribution for the products has expanded to Best Buy and Circuit City. Neither retailer carried the AVIC-N1 during the launch months last year.
Navigation sales as a whole, including portable models, are skyrocketing. According to NPD, sales for total navigation — including portable, but not including handhelds — grew by over 100 percent year-to-date this year over the same period in 2004, hitting $45 million in January through May sales, on about 51,000 units. Pioneer estimates the in-dash navigation market represents about 15 percent to 20 percent of that volume.
The in-dash market is expected to see further gains as real-time traffic services become more popular. But at present the market faces some minor challenges, according to suppliers and retailers. These include low consumer awareness for real-time traffic, and supply issues from Alpine — the No. 2 supplier — having missed the summer travel season without a 2005 navigation unit. Alpine says a new NVE-N872A navigation unit with dual real-time traffic systems is due in September.
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.