Buoyed by a wave of major technological advances, premium audio systems in cars are projected to attain double-digit sales growth worldwide at the end of 2011 and in the years ahead, with vehicle headunits also making room to increasingly accommodate mobile digital music players like Apple Inc.’s iPod, according to a new IHS iSuppli Automotive Research topical report by information and analysis provider IHS.
Global sales in 2011 of premium audio systems will reach 7.9 million units, up a robust 14 percent from 6.9 million units last year, on their way to some 13.3 million units by 2015. This year’s sales will yield worldwide revenue of $7.3 billion for the market, up 11 percent from $6.6 billion in 2010. Strong unit-sales expansion of 12 to 18 percent is expected during the next three years for premium audio, defined as systems coming with any or all of the following features: surround sound, eight or more speakers, and 400 watts or more.
Premium audio also covers branded audio—or systems with some sort of branding associated with them, which can be found in car locations like speaker grates, amplifiers or headunits.
Not surprisingly, premium audio systems are nearly always branded—so little to no overlap exists— and come from the established suppliers, given that car buyers are more comfortable with brands on which they are likely to spend anywhere from $300 to upward of $6,300.
Bose and Harman/Kardon are the leading premium audio system suppliers, with both focusing on surround sound systems with six or eight audio channels. Bose supplies systems and speakers to more than 15 original equipment manufacturers (OEM), including many General Motor brands, as well as Audi, Infiniti, Mazda, Fiat, Nissan and Porsche. Harman is used by OEMs such as BMW, Buick, Hyundai, Land Rover and Mercedes-Benz.
Other premium audio suppliers include Alpine; D&M Holdings for Boston Acoustics; Bowers & Wilkins; Burmester; Clarion; Hyundai Mobis for Dimension; Sony; Panasonic for ELS Surround and Fender; and Pioneer—just to name a few.
Premium Audio is Alive and Well
While some technologies like navigation, telephony and communications become increasingly off-boarded from vehicle headunits in favor of flexible standalone solutions, music remains a basic function.
As a “killer application,” music will continue to keep some form of vehicle headunit technology, in the form of amplifiers, receivers or speakers. And while premium audio previously was restricted to luxury and high-end cars, its application is now broadening to include mid-range automobiles as well—a strategy intended to steadily grow the market size for premium audio and expand their attach rate in vehicles.
In addition, numerous trends are impacting the premium audio space. For instance, surround sound, with 5.1 and 7.1 surround formats, is a key feature. Here, the growing availability of matrix systems that synthesize surround sound from stereo is the major factor for growth. On the other hand, rival discrete sound systems using six- or eight-channel recordings are seeing much lower usage due to the lack of availability and variety of such recordings.
Speaker count is also an important differentiator for premium audio, with high-end cars featuring as many as 14 speakers. Average premium wattage ranges from 507 for model year 2011 (MY 2011) cars in the United States, to 565 in Japan and 592 in Germany.
An important premium audio trend is the accommodation of digital music players in vehicles, with car manufacturers adding interfaces capable of playing mobile music. An auxiliary input is the least expensive interface, with nearly all premium audio systems sold in the United States currently including the feature. The use of an iPod interface also is becoming more common, now available in 91 percent of U.S. MY 2011 cars and in 61 percent of cars worldwide. The next two years will see the growing dominance of two more interfaces—USB and SecureDigital, IHS believes.
Far from becoming extinct, the CD player is not likely to exit the automotive market anytime soon. In fact, many CD or DVD drives now are able to read digital formats like MP3 and WMA—formats mainly used by portable music players. Meanwhile, the aftermarket has begun offering so-called mechless systems—headunits that include radio receivers, USB interfaces and a dial—but no CD or DVD slots.
Digital music also is available via satellite radio and digital radio in some regions. In the United States, the Sirius XM Radio Corp. is steadily increasing location-based services and other premium content for ongoing revenue growth, even though satellite radio on its own no longer drives unit sales growth. On the other hand, the digital radio technology known as HD Radio remains very much a rapidly growing technology, with considerable uptake taking place in U.S. vehicles from 2008 to this year.
Also growing in importance for premium audio systems are class D amplifi ers that fit with multichannel audio, featuring lower power requirements important in electric vehicles, as well as more than 90 percent high-power efficiency ratings that translate into improved output and less power lost to heat. Class D amplifiers, speaker technologies and other elements that go into low-energy audio systems are optimized for small cars like the Bose Energy Efficient Series audio system in the 2012 Fiat 500, or for hybrids and electric vehicles like the JBL GreenEdge audio system in the 2012 Toyota Prius v, which will use 120 watts of energy and convert to 600 watts of power output.
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