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OEM Integrators Embrace the iPod

8/20/2004 11:40:00 AM Eastern

New York - Over the next few months, the Apple iPod — the portable digital audio player that has become a phenomenon — is expected to gain a pipeline into the car, as the OEM integrators who brought us CD changer and satellite radio adapters are now focusing their efforts on the iPod.

Joining the BMW iPod interface now available and the Alpine iPod Interface due next month (see TWICE, June 7, p.50) will be several devices from integrators such as SoundGate, Sheridan, Wyo.; Precision Interface Electronics (PIE), Chatsworth, Calif.; Blitz Safe, Englewood, N.J.; and AAMP of America, Clearwater, Fla.

In an unusual twist for this market, some of these integrators will team up with larger companies to broaden distribution of a product they believe will have mass appeal.

SoundGate’s new iPod iCruze adapter will be distributed by Monster Cable, and PIE is said to be working directly with Apple to produce a co-branded Apple product.

In addition, aftermarket suppliers such as Kenwood are planning to join Alpine in offering iPod-capable devices, and the car companies themselves say they are looking into the possibility of supplying iPod-ready radios.

Apple has sold over 3 million iPods worldwide since November 2001 with almost 1 million selling in its third fiscal quarter, ended June 26.

SoundGate’s president Rob Puttnam said he had hoped to bring out the iCruze six months ago to take advantage of the growing iPod user base. “Based on the number of [iPod] users out there and the fact that every mass merchant has got the device and that it’s a mobile form of media, we envision the iPod going from home to car to personal backpack. That’s where the industry is going,” said Puttnam.

Monster Cable confirmed it signed an agreement with SoundGate, receiving the exclusive rights to distribute SoundGate’s iPod interface in the retail market. Monster expects to begin selling the iCruze in about 90 days.The iCruze allows factory OEM radios to control an iPod through the radio controls. It will have an optional add-on display to show ID3 tags of the iPod’s song names; it will not work through the car radio display.

“The potential of the product is so large it requires a company of Monster’s size to properly carry it out,” Puttnam said. Colin McClure, Monster’s marketing and product area manager, noted the company already has a “close partnership” with Apple, as it currently produces iPod cases and FM modulators sold through Apple’s retail stores.

Again affirming the broad market potential of the product, Monster said it will aggressively promote the iCruze, breaking with the company’s tradition of no advertising. McClure said he believes there is a pent-up market demand for car radio adapters. More than “sixty percent of comments coming into Apple are asking for a direct-connection solution for the car. This is something the user has been asking for — vs. having to rely on FM modulation.”

“Apple’s goal is to help drive iPod sales, and they see this as a device to help sell iPods,” McClure added.

Apple refused to comment on any licensing agreements or future accessories for the iPod.

There are currently many inexpensive iPod car radio interfaces available that use an FM modulator, but this newer round of devices connects the iPod through the car radio’s satellite or CD changer inputs. This allows users to control the iPod through factory radio controls and associated steering wheel controls, resulting in better sound quality, better ease of use and less driver distraction, said suppliers.In the case of the Alpine and Blitz Safe units, the interface also allows song and artist information to appear on the radio’s screen.

PIE said it is currently in R&D on an iPod interface, which would carry the Apple brand name. “Apple approached us and asked us to build something endorsed by Apple. We will have both our company logos on it,” said Bill Johnson, PIE’s sales and technical services VP. No further details on the product were available.

Blitzsafe, based in Englewood N.J., is looking to ship in September or October iPod interfaces for Sony, Alpine, Ford, BMW and MiniCooper radios, with more to follow, according to president/CEO Ira Marlowe. The device, the M-Link, is expected to sell for under $100. The interfaces can be mounted anywhere in the car, including a glove box or trunk, allowing radio to control and display all iPod functions, he said.

Kenwood said it will offer a “multiple media” device that will include an iPod input. Sales VP Keith Lehmann said the product will be the “the most flexible on the market” in terms of accepting new media and connections such as SecureDigital and USB. The product will be sold either as a stand-alone unit or as a companion to the Kenwood Music Keg, he said.

Car companies such as General Motors and Mercedes Benz said they are looking into iPod interfaces, according to corporate spokesmen.

“I know definitely that the car companies will offer these,” SoundGate’s Puttnam said. “The OEMs are very excited about items like this. It’s another value-add they can offer at the dealer level. The iPod BMW campaign has driven it out into the mainstream that this technology is available.

BMW began selling in early August an iPod adapter for its 2002 to 2004 BMW 3 Series, Z4 Roadster and X3 and X5 SUVs models for $149 plus installation. BMW, which has launched a major ad campaign for its iPod-ready radios, would not comment on the extent of the campaign, except to say it encompasses TV, print, billboard and Internet ads, according to a spokesman.