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Free AM Radio Back as Digital Radio Mondiale Hits The Road

Digital Radio Mondiale, Free To Air, Free To Transmit, With Near FM Quality

BOSTON – In recent research, Strategy Analytics studied the potential for Free Digital AM wave band radio providing enhanced in-vehicle infotainment. The latest Automotive Practice analysis, “AM Radio Is Back! Is Your Strategy Tuned-in? DRM Is Set To Challenge Growth In SDR, IBOC and DAB!” highlights the global revival opportunity for AM’s formerly popular, free long and medium wave radio bands. Now, with near FM quality sound, free to the listener and license free to the broadcaster, Digital Radio Mondiale is fueling growth in the traditional radio in-vehicle infotainment business. This development could help drive the anticipated growth of in-vehicle infotainment business, which Strategy Analytics estimates will be worth $44 Billion by 2011.

The recently demonstrated Visteon in-vehicle Digital Radio Mondiale (DRM) prototype radio head unit, unveiled at the Berlin IFA World of Consumer Electronics Show, challenges the growth in SDR (Satellite Digital Radio), IBOC (In-Band On Channel) and DAB (Digital Audio Broadcast), by providing a low cost near equivalent quality service with many features of the later formats. DRM will be cheaper and easier to transmit, as well as cheaper and easier to receive, compared to other digital broadcast formats, making it an extremely attractive proposition for in-vehicle entertainment. Manufacturers of in vehicle infotainment systems will need to quickly incorporate DRM into their platform strategies, enabling a quick rollout as the demand for DRM takes off.

Strategy Analytics forecasts that the market for in-vehicle audio entertainment systems will grow by over 7 percent CARG, worth $44 Billion, in terms of OE and aftermarket systems sales, across North America, Europe and Japan, by the end of 2011, increasing from $27 Billion in 2004.

“There is a continued and growing trend toward automotive multifunction entertainment systems, including digital radio. Consumer high value perceptions of emerging entertainment features means that there are significant margin opportunities for car makers and systems suppliers, alike,” says Simon Schofield, Senior Analyst, Automotive Practice. “Digital Radio Mondiale, a free and world broadcast standard, presents an opportunity to the car makers and systems suppliers, enabling them to protect the premium value of its business within the so-called Golden-Stack of the radio-head from ongoing encroachment from portable devices.”

“Over the next 2-3 years, the market for in-vehicle entertainment systems will be most significantly impacted by new digital audio products that play ‘soft’ music files and digital broadcast technologies,” says Joanne Blight, Director, Automotive Practice.

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 http://www.strategyanalytics.com.

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