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Broadcast Sources Gaining In Car


Sales of head units with built-in HD Radio
and Pandora Internet-radio control are rising — at least
through stores with assisted sales floors, suppliers and retailers
told TWICE.

And aftermarket satellite radio has the potential to follow
suit with the recent launch of the universal SiriusXM
tuner and the planned launch of satellite radio 2.0 service.
The hide-away universal tuner reduces the cost of adding
satellite radio to a satellite-ready head unit and adds many
features not available before in most hide-away tuners. Features
include song alerts, artist alerts, sports-game alerts,
iTunes tagging, and embedded memory to pause and rewind
a program up to 30 minutes. In addition, only a handful
of OEM satellite radios offer some of these universal-tuner

Satellite radio 2.0 service, due to launch in the coming
weeks, adds more channels and more Hispanic-oriented
content than current tuners. The service will be available
first in transportable plug-and-play tuners in the coming
weeks followed by availability next year in OEM systems
and in a next-generation universal aftermarket tuner.

A desire to discover new music is the likely reason behind
the HD Radio and Internet radio gains, and that desire
could be a factor that helps reverse the slide in aftermarket
satellite-radio sales, suppliers and retailers said.

“Listening to broadcast media is up again,” said Pioneer
marketing director Ted Cardenas. “With an iPod, you’re listening
only to your music collection.” With HD Radio’s multicast
feature, satellite radio and Internet radio, on the other
hand, consumers can expose themselves to music that they
might not have heard before, he noted.

Said Jim Warren, senior merchandising VP of the Car
Toys 12-volt chain, “Content is driving demand. It’s pure and
simple.” Whether HD Radio, SiriusXM or Pandora, he said,
“Consumers completely get it, and they are very motivated
to replicate their content experience throughout their lives.”

The picture for head units that tap such broadcast
sources, however, might not be completely rosy. Consumer
Electronics Association (CEA) statistics show factory-level
sales of in-dash CD head units with built-in HD Radio
slipped 34 percent to 875,577 through August out of total
sales of 4 million CD head units, which were down about
1 percent. CEA doesn’t track multimedia head units with
built-in HD Radio. Sales of all multimedia head units were
up 52 percent to 385,360 units.

The CEA-reported decline in HD-equipped CD head
units might be attributable to a sales shift in which under-$
100 head units have grabbed a higher percentage of
sales through all distribution channels, thanks to a flagging
economy and aggressive price moves by some suppliers,
one supplier said.

Not all suppliers, however, are convinced that sales of HD
Radio-embedded head units are down. Pioneer’s Cardenas
points to a growing selection of heads with built-in HD
Radio and noted that Pioneer’s sales of such models have
gone up, as have the sales of several competitors’ models.

Whatever the overall HD Radio sales picture, multiple
suppliers and specialty retailers believe sales of HD Radioembedded
head units are rising through assisted sales
floors, even if only slightly, thanks in large part to a price
premium of only $10 to $20 vs. comparable CD receivers
with analog tuners. In 2009, that premium was about $50,
suppliers said.

Most of the HD Radio gain is coming in markets where
large clusters of stations are broadcasting HD Radio signals,
suppliers and retailers noted.

All Car Toys stores, for example, are in such markets, and
the majority of head units sold by the chain incorporate embedded
HD Radio, said Warren. The majority of the chain’s
head-unit SKUs also incorporate HD Radio, he added.

“In a fully or semi-managed sales floor, it’s not that difficult
to step customers up,” said Kenwood senior VP Keith

“It’s an easy step,” agreed Progressive Retailers Organization
(PRO Group) executive director Dave Workman.
Although consumer awareness is relatively low, and no one
comes in asking for HD Radio, once a salesperson explains
the feature and its benefits, “the adoption curve is good,”
he said.

Said Rob Elliott, executive director of the In-Car Experts
(ICE) buying group, “When there’s a good assortment of appealing
HD Radio stations, the dealer will pitch the HD Radio
version and have no problems getting the additional dollars
as long as he demos it and makes the consumer aware.”

The same scenario applies to head units that control
most of the functions of a Pandora Internet radio app on
an iPhone that’s connected to the USB port of an iPod/
iPhone-controlling head unit, Elliott said. Salespeople
can take consumers up about $30 when
they pitch a head unit with Pandora control and
other step-up features, he said.

Specialists also see sales of Pandora-controlling
head units rising in part because the feature
is available in more head units at prices starting
at about $130. Although CEA couldn’t provide a
comparison with last year, CEA statistics show
about 6 percent of the 4 million CD receivers
sold through August at the factory level controlled
an iPhone’s Pandora app.

The incidence of Internet radio streaming in
the car, however, could be greater than those
statistics indicate. Any head unit connected
via USB to an iPhone can stream Internet radio,
even if the app must be controlled from the
phone’s touchscreen. In addition, any head unit
with an aux input can stream from any connected

For now, however, only a minority of consumers
stream Internet radio through a car stereo,
but most of them are the younger consumers
who make up the primary aftermarket demographic,
according to a July survey by Arbitron,
Edison Research and Scarborough. The study
found that 19 percent of respondents ages 18 to
24 listen to Internet radio in the car.

For dealers of any stripe, aftermarket satellite
radio has been on the decline because almost
all new cars sold today come with OEM satellite
tuners, but that could be changing. For some
specialists, including Car Toys, sales of aftermarket
hide-away tuners are rising.

The specialty chain cites the new SiriusXM
universal tuner, which is controlled from select
head units available from Sony, Alpine, Dual and,
next year, Kenwood. “We are seeing steadily rising
demand for the new tuners and expect this
to increase further as additional features are
released,” said Warren. “The new tuner’s size
eases installation, while the new price point is
resonating with the consumer.”

ICE’s Elliott also sees upside potential for the
universal satellite-radio tuner. “SiriusXM will play
a bigger role than ever in the very near future”
through 12-volt specialists, he said. With the
universal tuner, he said, “now there’s something
new to explain.” In addition, he said, “SiriusXM is
getting more in sync with independents.”