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OEM Auto Radios To Rebound In 2013: iSuppli

El Segundo, Calif. – Global OEM shipments of auto head units are expected to sink by 25 percent to 48.4 million units in 2009, but will rebound by 2014, said iSuppli.
To help boost sales, suppliers should take a cue from the PC industry and convert options, such as Bluetooth and HD Radio, to standard features on car radios, said the analyst firm.
Auto OEM head unit shipments saw a recent peak in 2007 of 68.3 million units, declining to 64.6 million in 2008 before precipitously falling to a projected 48.4 million this year. Shipments will not rebound until 2013, and by 2014 sales will surpass 2007 levels, achieving sales just short of 70 million units, iSuppli said.
The car radio industry “could learn much from the development of the PC,” said iSuppli principal analyst Richard Robinson. “Early PCs offered a very limited range of default technologies on the motherboard, with additional features like networking, graphics-processing, storage-interface and audio support all handled by ‘plug-in’ solutions, which added to their Bills of Materials and often were difficult to set up.”
Eventually it became nearly impossible to sell a PC without much of this technology as standard features. Now PCs are often differentiated more by software than hardware, he said.
iSuppli encouraged automotive manufacturers to shift to products that allow a software download/upgrade environment. “It is essential that the burden of mass firmware updates, such as Bluetooth profile updates or new application installs, be passed onto the consumer,” Robinson added. This would allow technology updates for the typical 10-year ownership of a vehicle.
In addition, these improvements must be offered on lower cost as well as high-cost vehicles. It is-entry level cars that are often purchased by younger, more tech-savvy consumers. This notion of “raising the baseline” of features in the car is supported by the popularity of the Ford Sync, said Robinson.
iSuppli believes that the new default baselines for audio will include supporting HD Radio, multichannel speakers, voice control over devices like iPods and low-cost navigation. Important options are mobile TV and backup camera support.