Radios transform with more connections, better sound quality

  • 10-May-2010 10:22 EDT

iSuppli predicts that global shipments of premium audio systems will roughly double to 13.7 million in 2016.

Radios continue to evolve rapidly, with a growing percentage providing premium quality and more versatility through the additions of USB ports. They are also expected to begin eliminating CD mechanisms, and some may offer hard drives that hold more music and maps.

Radio head units are adding more functions such as MP3 connectivity, and many incorporate navigation systems. Sound quality is also improving. iSuppli Corp. predicts that global shipments of premium audio systems will roughly double to 13.7 million in 2016.

After a slump in 2009, growth should return this year, rising to 6.7 million units. The market research house defines premium audio as having eight or more speakers, amplification in excess of 400 W, and 5.1-channel or better discrete surround sound.

The outlook is even more bullish for consumer product connectivity, according to Strategy Analytics. Automotive USB unit installations are forecast to skyrocket from a mere 800,000 units in 2008 to more than 40 million in 2016. That is a CAGR (compound annual growth rate) of 64%.

As MP3 connectivity expands, automakers are struggling to determine whether they can remove CD players. In 2016, Strategy Analytics predicts that 30% of all cars and light vehicles, 23 million units, will have CD-less audio systems. That will save OEMs space and around $20 per unit, market researchers noted.

However, the decision to eliminate CDs isn’t being made lightly. “Eliminating CD players might work best in vehicles that target younger people who don’t have a large catalog of CDs that they want to listen to," said Mark Fitzgerald, Senior Analyst at Strategy Analytics. Some research shows that as many as 80% of potential vehicle buyers view CD players as a must-have technology.

Storage poses another question for radio head units. Some OEMs use hard disk drives to store music and navigation maps. Toshiba's Storage Device Division, which recently boosted capacity of its single-platter drives to 200 GB, pegged the market for automotive drives at 10 million units in 2008. Strategy Analytics predicts growth to 12 million in 2010.

However, growth will be slow. Some design teams feel it is more effective to have vehicle owners use iPods and other devices for storage and control, saying it is easier and more cost-effective. Drives are also being challenged by flash memory, which provides more ruggedness.

“The big question for drives is when flash capacities and prices are at levels that attract OEMs,” Fitzgerald said. “The other question is whether consumers want to manage another user interface to find data on the vehicle’s drive. Many may prefer to carry their own equipment into the vehicle.”

Along with MP3 players, those portable options include streaming Bluetooth phones. Streaming Bluetooth has slightly lower sound quality than wired USB connections for iPods and other gear, but it eliminates the need for cables.

“People will always give up a little quality for convenience,” Fitzgerald said.

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