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Exploding Consumer Demand for Digital Music and Radio Transforms Automotive Entertainment

Emerging Digital Audio Products Drive $36 Billion Multimedia Market

The new Strategy Analytics automotive infotainment report, “In-vehicle Infotainment Systems Market Forecast 2005-2012,” predicts that increasing demand for new digital entertainment features in the car will result in the automotive multimedia systems market reaching 97 Million units by 2012. The average revenue per system sold will increase rapidly, to $375–an increase of over 20 percent over 2005 figures.

Japanese suppliers, most notably Alpine, Panasonic, Kenwood and Pioneer, are taking the market lead in rolling out the widest range of features, particularly audio systems capable of playing compressed music files and digital radio, and offering connection for portable MP3 players. According to a Q4–2005 Strategy Analytics automotive consumer survey, over a third of all new car buyers in each of the US, France, Germany and the UK intend to purchase an MP3 player in the next 12 months.

Joanne Blight, Director in the Automotive Practice, notes, “By far the most significant trend set to hit automotive entertainment in the next 2 years is the rapid adoption of digital music. Our survey shows that almost half of new car buyers in the US, France, Germany and the UK intend to bring compressed format music files into their cars in order to play music through their audio systems.” Radio also remains a very strong automotive entertainment media, but in-car radio and music listening habits vary significantly across countries.

She concludes, “Automotive suppliers who best understand demand trends for multifeatured audio entertainment outside the vehicle will be most successful at unlocking new opportunities inside the vehicle. By its very nature, a car provides an audio environment. But there is a real danger that too many automotive manufacturers will miss key consumer demand trends by getting distracted by the recent growth in portable navigation and DVD video.”

About Strategy Analytics
Strategy Analytics, Inc. – a global research and consulting firm – provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. For more information, see

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