Las Vegas - iBiquity's digital AM/FM technology, dubbed HD Radio, will appear in at least seven car audio prototypes and one home audio prototype here at CES in preparation for shipment of a limited selection of products later this year.
iBiquity and some suppliers said they expect first-year sales only in the tens of thousands of units, but in late 2004 and in 2005, sales will ramp up as more stations go on-line, consumer awareness grows, and more home and car receivers ship with built-in HD Radio.
iBiquity's in-band on-channel (IBOC) technology lets existing AM and FM stations use their existing transmitters, antennas and dial positions to deliver digital programs.
It also lets broadcasters simultaneously deliver analog and digital broadcasts on their assigned frequencies to ensure that consumers' existing analog radios don't become obsolete overnight.
Last October, the FCC approved hybrid analog/digital broadcasting on an interim basis while it prepares to officially sanction the hybrid technology later this year.
The FCC is holding off on approving all-digital broadcasts pending further tests.
To date, about 100 stations have installed hybrid broadcast equipment. (See timeline, right.)
Consumers wanting to hear those stations' digital signals will turn initially to Kenwood and Audiovox. Kenwood plans April or May shipment of an outboard tuner that can be controlled from 17 new head units and from CD-changer-controlling head units sold in the past few years. The targeted suggested retail is $350.
For its part, Audiovox plans to show a mock-up single-DIN CD receiver with integrated HD Radio tuner due in the early second quarter.
iBiquity contends initial integrated home and car receivers will generally cost consumers about $100 more than otherwise-equivalent non-HD models, but suppliers said they weren't yet sure what future integrated models would cost. One supplier, however, thought $150 for adding HD Radio to a home receiver was more likely. Add-on tuners such as Kenwood's cost significantly more, however, in part because they must incorporate analog AM/FM circuitry that duplicates what is already inside a consumer's existing receiver.
In a year's time, iBiquity 'is confident' that the retail premium will be cut in half to about $50, senior VP Jeff Jury said.
OEM Plans: Also at CES, the first HD Radios destined for automakers will appear. Visteon, for example, will demonstrate a working double-DIN CD-receiver. The receiver will be offered by an unnamed European automaker as a factory-installed product in calendar 2004 for the 2005 model year.
Ford, a Visteon customer, said it has no specific timeline to offer HD Radios, but a spokeswoman said, 'It's definitely something we're interested in.'
Delphi, another major radio supplier to automakers, is exhibiting here and plans to deliver OEM HD Radios within a year.
Home Coming: Kenwood also plans to deliver a home tuner sometime in 2003 at a targeted suggested retail of $400-$500, but a prototype won't be available in time for a CES demo. It could be added to an existing home receiver.
Harman Kardon, on the other hand, will integrate HD Radio into a home receiver at CES, where it will demonstrate a functioning engineering model. The company plans fall shipments of an HD-equipped receiver at around $2,000, said president Tom McLoughlin.
Two companies that plan to demo car prototypes - Alpine and Jensen - held out the potential to ship products in late 2003, but other companies here with prototypes are targeting 2004 or beyond. JVC said its car product won't ship until 2004 or 2005, and Sanyo is targeting 2004.
At press time it looked like three major home and car audio suppliers - Sony, Pioneer and Panasonic - do not plan 2003 launches of home or car tuners, nor does JVC on the home side. Clarion said it is committed to introducing the technology 'in the near future.'
Although the receiver rollout will be measured, iBiquity's Jury said he is pleased with the number of companies supporting the technology at CES. 'We had four CE partners demonstrating last year, and we're up to 13 this year,' he said. Besides consumer-goods makers, the partners at CES include Alps and Toko, which make front-end modules that receive AM/FM signals, and semiconductor maker Texas Instruments, which said its credit-card-size HD Radio processor/decoder chipset will go into volume production in January.
Geographic Diversity: Also on the plus side, iBiquity achieved 'more geographic diversity [among radio stations] than we thought' by January, Jury said. That makes digital AM/FM more appealing to automakers, he said.
Nonetheless, iBiquity fell short of its goal to plant the technology in 30 to 50 stations in six priority markets by the end of 2002, with an early-2003 goal of about 70 stations, accounting for 50 percent of radio listeners in those markets. The intent was to create a critical mass of potential listeners to generate demand for receivers in the six metro areas, which are Chicago, Los Angeles, Miami, New York, San Francisco, and Seattle.
By the end of 2002, only about five to 10 stations were operating in the six markets, but by CES, Jury said he expected about 35 to have installed the equipment. Those stations would reach 40 percent to 50 percent of radio listeners in three of the six target markets, he said.
For its initial rollout, iBiquity also targeted a limited number of stations in Atlanta, Boston, Dallas, Denver, Detroit and Washington.
Competition from satellite radio is one factor contributing to broadcaster adoption, he said. 'A number of stations [including WOR-AM in New York] are already mentioning on air that they're digital.' Terrestrial broadcasters 'want to be heard' above the satellite-radio buzz, he said.
AM stations are also looking to improved sound quality to resurrect their fortunes, the FCC has said.
iBiquity's ownership includes 15 major radio broadcast groups, including top-dog Clear Channel. Ford and Ford supplier Visteon are also investors.
Value seen: Almost to a person, marketers see value in digital AM/FM. It would let AM broadcasters deliver near-FM-quality sound.
FM broadcasts could approach CD quality, iBiquity contends.
The technology will 'eliminate' multipath noise and eliminate other AM and FM noise in all but the most extreme circumstances, Jury said. The technology also delivers program information.
Said Kenwood VP sales and marketing Bob Law, 'AM and FM are now the last formats that don't have some form of digital capability.
We believe consumer acceptance will be very high once word gets out.'
Chad Vogelsong, JVC product and marketing manager for car audio, added, 'It will be the standard.' The key appeal, he said, is 'better sound quality' without paying a subscription.
Some suppliers noted that it will take more than a handful of stations in a given market to entice many consumers to upgrade.
Recoton Audio's senior operations VP, Herman Miedema, also said it would take a price premium of only $50 'to make it attractive.'