Trends
• Like peas in an iPod: headunits and Apple’s digital player go together well.
• Satellite radio takes off with more than 5 million customers.
• Navigation systems add real-time traffic reports.
• Hot deal: In-dash DVD/monitor prices are falling.
• Broadcasters accelerate conversion to HD radio.
• CEA’s getting the MOST out of device interconnectivity.
• “Digital Driver” campaign promotes mobile electronics.

The economic signposts for mobile electronics point toward a modest but continuing business advance. The indicators may not all be marching forward in lockstep, but on balance the numbers tell a positive story. When you fold in the full complement of product categories tracked by CEA in the aftermarket car audio and video sector (see table below), there is roughly eight percent growth in factory-to-dealer shipments in 2004, both in unit and dollar sales.

That’s good news given that gasoline prices pushed right through the two dollar per gallon mark; even for consumers who don’t own a gas guzzler, high prices at the pump are taking a bite out of discretionary income that might have been allocated otherwise for automotive add-ons.

The underlying reality, however, is not quite so rosy. Looking at traditional autosound categories, the market was down slightly— 1.4 percent in units and 1.6 percent in dollars. Examine the numbers more closely, and you find that while sales of headunits held its own (up 3.4 percent in units and 5.2 percent in dollars), amplifier sales took a hit (down 5.1 percent in units and 12.1 percent in dollars) and car speakers sales were off 5.4 percent and 3.2 percent in units and dollars, respectively.
CD changers continue to move at retail as slowly as a sundial. Last year they fell sharply—by 35 percent—but that can be explained by the rise of MP3 and other digitally compressed music formats, as well as the emergence of hard-disk-based source components and headunits. Why would you need a CD changer when you can fit hundreds of compressed tracks on a single CD? Also, on the OEM side, car makers increasingly are offering headunits that have integrated CD changers in them.

The good news is that in several respects, market conditions are better than CEA sales figures indicate:
• Do the math and it’s easy to understand why so many autosound companies are suddenly so smitten with the iPod connection. There are 10 million owners of Apple’s iPod portable music players in the United States. Suppliers are listening and they’ve come up with easy-to-use interfaces that allow a user to listen to his or her iPod music collection through their latest audio headunits.
• Satellite radio is carrying the autosound segment. Aftermarket shipments of receivers continue to reach new highs, and OEM installations are climbing too. Service providers Sirius and XM are demonstrating once again that “content is king,” shrewdly adding hot on-air personalities and moving, albeit slowly, toward delivering video broadcasts. CEA expects similarly positive results in the satellite radio category again this year.
• Consumers seeking ways of enjoying lengthy car rides are spurring stronger-than-usual demand for mobile theater products, including mobile video displays, in-dash DVD players and DVD changers.
• Another area of market strength is in combination navigation/entertainment systems. A few aftermarket suppliers now have product available that can receive real-time traffic data. No longer will you have to wait until some local radio station decides to update traffic information—the latest reports about accidents and delays can be downloaded automatically to your car's navigation system.
• CEA’s initiative to develop a gateway to the MOST network, though still in the early stages of development, will assure device inter-connectivity and create opportunities for renewed growth in telematics.