After many years of high growth, 12-volt video sales declined last year, with many blaming OEM sales as the culprit.
According to NPD Techworld, Port Washington, N.Y., sales of mobile video dropped 20 percent in dollars and 22 percent in units for the ten months through October 2004. Total mobile multimedia sales numbered 409,000 units compared to 525,000 in 2003 and measured $202 million compared to $252 million in 2003. Oddly, average selling prices increased, according to NPD, from $480 in 2003 to $495 in 2004, although prices within most categories have fallen.
“The biggest factor is the OEM's speed to market,” said Audiovox senior VP mobile electronics Tom Malone, adding, “[Car makers] determined very quickly that mobile video solutions are a strong aid to moving vehicles, so they offer it now in many more vehicles and there are far fewer opportunities in the SUV and minivan market than there were a year or two ago.”
A second factor, he says, is that portable video players that can be carried to and from the car have dropped significantly in price, down to $99or $129, where an overhead monitor/DVD might cost five times as much.
“In many cases, the customers don't even make it to the 12-volt section of the store. So the retailers need to do a better job of showing that the portable is really a personal solution and then show the benefits of larger screens and multiple screens in the headrest. They need to let the consumer know there are many options in mobile video,” Malone said.
At least one specialist, Autosound of Lexington, Ky., disagrees. “Portable people are really infrequent users. Most people get tired of the big bags hanging off the seat. If they use it every day, they get tired of cords and wires,” said Harvey Wright, CEO of Autosound of Lexington, and president the Mobile Enhancement Retailers Association. Wright's biggest concern is price and profitability, noting overhead monitor prices have fallen to a low of $399 for a top brand model, compared to $1,500 several years ago. “That's what's killing us. The biggest issue is the market competition,” he said.
The fact that dozens of suppliers have entered the market recently, coupled with the fact that now the pie is shrinking, is expected to give way to discounting and price wars, said suppliers including Audiovox, Alpine and JVC.
“I think it will be a very competitive year,” said JVC GM mobile electronics Gary Defeo.
However, he pointed out that the declines shown in the NPD numbers may not be as severe as they look because NPD classifies the very popular Pioneer AVIC-N1 as a navigation unit, rather than a DVD player, although it may be used for both purposes.
As of September, Pioneer claimed that the AVIC-N1 had captured well over 50 percent of in-car navigation sales, crediting the in-dash DVD unit's ability to play DVDs while performing navigation functions.