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Shakeup In PND,Car Stereo As2008 Ended

1/08/2009 02:00:00 AM Eastern

Shifts in the car stereo and portable GPS markets caused a string of restructuring and consolidation announcements heading into International CES from Blaupunkt, Clarion, Magellan, Panasonic and Harman/Kardon.

Car stereo company Blaupunkt was sold to the Aurelius Group, a German holding company for an undisclosed sum on Dec. 17 by its German parent the Bosch Group.

Clarion cancelled its independent manufacturer representatives in December and is now selling direct to top accounts and through distributors to its other retailers.

In personal navigation devices (PNDs), Magellan agreed to be sold to Mitac, the parent company of Mio last month. And two PND brands, Panasonic and Harman/Kardon, told TWICE they exited the U.S. portable GPS market.

In car stereo, the business of selling a "deck and 4" (CD player and four speakers) is declining resulting in fewer sales of traditional car audio products.

In addition, the OEM market for car radios in new cars is shifting. Bosch said it sold Blaupunkt because its OEM radios are now very different from the consumer radios sold by Blaupunkt.

OEM radios have become stealth receivers buried in the dash that are linked to other car functions. Bosch said it no longer had the resources to support Blaupunkt, as it shifted over to the newer-style OEM radios.

In PNDs, the market is shifting due to dramatic price reductions over the past 12 months.

Most PND sales are now below $300, leaving little demand for high-end products and creating stiff competition at the low end.

Also, the recession may be impacting sales. iSuppli expected PND unit sales for the fourth quarter 2008 to be flat, compared to the same quarter in 2007. By contract, fourth-quarter sales in 2007 were up an estimated 400 percent over 2006.

Dollar sales in PNDs should be down by 10 percent for the fourth quarter 2008, compared to the same quarter in 2007, said iSuppli.

In addition to Panasonic and Harman/Kardon, other PND suppliers that recently left the U.S. hardware market include Audiovox, Dash Navigation and JVC. Navman was also purchased by Mitac in early 2007 and the brand was discontinued in the United States.