In-car Entertainment? Bring your own, Industry says
Posted on Thu, 10 Jan 2008 02:00:00 CST | by Luigi Lugmayr
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By Georgina Prodhan, European Technology Correspondent
LAS VEGAS (Reuters) - Car travelers should get used to plugging in their own
entertainment gear as all but luxury automakers give up a decades-long struggle
to build in the latest audio and video equipment.
Industry players say automakers are getting new models to market faster than
before but consumer electronics change more rapidly, meaning automakers' efforts
to lift sagging profit margins by installing fancy gadgets can backfire as they
quickly pass their sell-by date.
It still typically takes three to four years to put a redesigned car on the
road, compared with about nine months for a new consumer electronics gadget to
find its way to market.
The car of the future will have the necessary chargers, iPod mounts, and ports
for navigation and even the Internet, rather than a factory-installed all-in-one
system.
"I don't want another service provider, I don't want another user interface, I
don't want to screw around," said T. Russell Shields, chairman of Ygomi LLC,
owner of vehicle communications company Connexis. "I want to get it the same way
I get it in the home and in the office.
Market research firm iSuppli estimates auto electronics will grow by an average
of 7 percent per year to reach more than $50 billion by 2012 from $38 billion in
2006.
Automakers get a slice of that, but as they struggle with flat sales in mature
markets, they eye with envy the lucrative "aftermarket" accessories from Pioneer
Corp or Kenwood Corp installed in cars after they are sold.
For fear of building in duds, carmakers typically wait a year or so to see if a
new device or technology takes off.
They then have to make modifications to allow for the fact that drivers should
keep their hands on the wheel and not be distracted. And while a car's buyer may
own it for 10 years, even a cherished electronics gadget has little chance of
surviving format shifts, such as those from tape to CD.
IMPORTANT MISTAKE
The world's most successful consumer electronics device, the cell phone,
actually began life as a radiotelephone for the car -- essentially a two-way
radio connected to the landline phone system -- built by Motorola Inc in 1946.
But today, even auto parts maker Delphi Corp , struggling to emerge from
bankruptcy after shutting plants and slashing costs, admits the car industry can
no longer hope to compete with consumer electronics' aggressive product cycles.
ISuppli automotive analyst Richard Robinson says: "I think the important
mistake, an error that's been made in the past by the guys in automotive, is to
think that next-generation technology must be developed in the car."
Their best chance is to offer connectivity for the many gadgets on the market,
pleasing customers who expect to be able to use the same devices they use at
home and on the street.
Jeffrey Owens, Delphi's head of electronics and safety, said embracing the
multitude of standards for wireless and other connections, while potentially
confusing and costly, was the only way forward.
Ford Motor Co's "Sync" venture with Microsoft Corp , which aims to bring
computer-style connectivity to a car, and General Motors Corp's OnStar
navigation and hands-free calling system have given those carmakers at least a
temporary advantage.
"You can uncouple the car and the infotainment product cycles and bring new
technology in when it's ready," Owens said during a panel discussion at the
Consumer Electronics Show in Las Vegas.
Milton Beach, a product spokesman on the Delphi booth at CES, said: "We've found
out that USB, Bluetooth and the serial jack are what have emerged as sort of
standard. But there are no standards."
KISS AND MAKE UP
The mainstream consumer electronics industry has traditionally been more
concerned with meeting the exacting demands of its own direct customers, such as
improving battery life and interoperability with wireless devices and PCs.
With the exception of specialist firms working closely with carmakers,
especially premium brands such as BMW AG , they have made few concessions to
carmakers' needs.
But as auto makers accept the need to respond to consumers' expectations faster,
the rhetoric between the two industries has become friendlier.
CES organizers had GM Chief Executive Rick Wagoner make a keynote speech this
year, eager to hear "his vision for the growth of consumer technology in the
automotive industry," said Gary Shapiro, Consumer Electronics Association
president.
In the keynote, Wagoner said: "The auto and electronics industries go way back.
At GM, we think we'll be even closer going forward."
Yet the two industries have been a bit wary of each other ever since Delphi
first put a radio into a Buick in 1936.
"Remember, this was before TV, so families actually sat around and watched the
radio," Delphi's Beach said. "It was thought that putting a radio in the car
would distract drivers from watching the road."
(Additional reporting by Kevin Krolicki; Editing by Braden Reddall)
© Copyright 2007 Reuters.
Photo:
A Chevrolet Volt electric hybrid vehicle comes on stage carrying General Motors Chairman and CEO Rick Wagoner for his keynote address at the Consumer Electronics Show in Las Vegas January 8, 2008. REUTERS/Rick Wilking
Posted on Thu, 10 Jan 2008 02:00:00 CST | by Luigi Lugmayr
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