e.Digital Corporation (fka EDIG)

[culater33]

Strategy Analytics - Emerging In-vehicle Entertainment Systems Product Status
Strategy Analytics surveys show that safety and entertainment are at the centre of consumer demand and willingness to pay. In addition consumers are seeking to have a wider choice in entertainment products when they buy a new car. There are significant opportunities for emerging audio and display based entertainment systems, initially led by aftermarket activity but increasingly in the factory fitted market. During 2002 there has been significant growth in the availability and demand for compressable format CD players, primarily MP3 capable systems, multifunction entertainment systems, multiple in-dash CD players, and display based entertainment systems, primarily DVD based passenger entertainment systems. Strategy Analytics’ market analysis shows that MP3 has become a key feature on more than 30% of each manufacturer’s aftermarket product lines in 2002, as opposed to only one model in every line in 2001. Price positioning and identifying key target consumer markets will be key to addressing the emerging entertainment opportunities. At this early stage early market leaders vary according to region and type of emerging entertainment product, but the most notable early players include Pioneer, Kenwood, Alpine Delphi, Visteon and Sony.


Contents


1 Introduction
2 Key-Point Conclusions
3 CD based Audio Systems

3.1 Europe
3.2 United States
3.3 Japan and South Korea
3.3.1 Japan
3.3.2 South Korea
4 Rear Seat Passenger Entertainment (RSE) Systems

4.1 Aftermarket
4.1.1 Europe
4.1.2 United States
4.1.3 Japan
4.1.4 South Korea
4.2 OEM
4.2.1 Europe
4.2.2 United States
4.2.3 Japan and South Korea
5 In-vehicle Mobile TV Systems

5.1 Aftermarket
5.1.1 Europe
5.1.2 United States
5.1.3 Japan and South Korea
6 High Capacity Audio Storage

6.1 Europe
6.2 United States
6.3 Japan
7 Product Supply Relationships

7.1 Europe
7.2 United States
7.3 Japan & South Korea

Key Point Conclusions

EMERGING AUDIO ENTERTAINMENT SYSTEMS

The emerging technology in-vehicle entertainment systems market is currently dominated by compressed format CD – primarily MP3. Strategy Analytics’ market analysis shows that MP3 has become a key feature on more than 30% of each manufacturer’s aftermarket product lines in 2002, as opposed to only one model in every line in 2001.

Key new developments in 2002 have been focused on the inclusion of MP3, WMA (Windows Media Audio), CD-R, CD-RW and DVD capabilities in audio systems in the aftermarket. Active players in the emerging in-vehicle entertainment audio technologies market are wide ranging and the most notable players include Pioneer, Kenwood, Sony, Blaupunkt and Alpine.

Inclusion of MP3, WMA and CD-R/RW is a part of a wider trend towards increasing multifunction system activity both in the OEM and aftermarket. Active players in the multifunction system market include Siemens VDO, Becker, Alpine, and Clarion.

During 2002 MP3, CD-R and CD-RW capabilities were not very common in the OEM audio market, although there is increasing activity in the North American OEM market.

The aftermarket is still primarily for 1-DIN sized systems and Strategy Analytics expects a strong 1-DIN market for the next 2-3 years. There is increasing use of 2-DIN by OEMs, particularly in Europe because 2-DIN provides manufacturers the flexibility to offer customisation. In Q2-03 Strategy Analytics will publish an in-depth DIN Trends analysis for the OEM and aftermarket. Early European research indicators and market outlook are summarised in Exhibit 3.1.

During 2002 more than 6 leading suppliers including Pioneer, Sony and Kenwood launched their first hard-disk-based head units and first radios with removable media.

EMERGING DISPLAY BASED ENTERTAINMENT TECHNOLOGIES

The range of in-vehicle display entertainment systems increased significantly during 2002 in all geographical markets, and particularly in the US. This includes entertainment systems that also offer some navigational capability. Strategy Analytics estimates that around 400K RSE units were shipped in the US OE and aftermarket in 2002, representing around $429 million worth sales.

The high growth of DVD in the home has accelerated the transition of the automotive RSE (rear seat entertainment) system market from VHS to DVD.

Leading OE players include Delphi, Visteon, and JCI, and in the aftermarket Delphi, Kenwood, Sony, Pioneer, and Blaupunkt.

To date, in-vehicle entertainment systems have largely been aftermarket products, but during 2001/2 RSE systems have started to be installed as standard or optional feature on certain vehicle ranges, particularly in the US.

Systems are available as standard on high-end minivans and SUVs (sport utility vehicles) in the US, such as the Oldsmobile Silhouette Premiere Minivan, and optional on many others such as the Toyota Sequoia SUV. Prices start at around $1,000 for optional factory fitted systems.

Ceiling mounted screens are the most popular display location for aftermarket systems.

The location of the main console (where one inserts the tapes or DVDs as well as connects video games and camcorders) is usually either on the floor between the front seats or on the ceiling, and the screen is either mounted on the ceiling or on the rear of front seat headrests.

Computer gaming is starting to become available on rear seat entertainment systems, with a significant opportunity expected for plug ‘n’ play console gaming.

In-vehicle Television is a market that is still in its infancy and has a wide range of analogue and digital technology, and associated cost challenges that need to be addressed before it is adopted on a wider scale. The main problem hitherto has been one of poor reception either when a vehicle is in motion or in a built-up area, a limited target market opportunity in passenger car ranges, and growing concerns over driver distraction issues for dash located TV systems.

Currently the main in-vehicle TV market activity is in Germany, Japan and the US.


Further Information

For more information, please contact Kevin Nolan on [phone] or at [e-mail]
http://www.telematicsvalley.org/doc.htm/177/#
culater