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In-car Entertainment - US - September 2009

This report explores the in-car entertainment market in the US. It provides insight into the external and internal factors affecting automotive audio and video component sales, consumption and trends, and what they mean for future sales, promotional campaigns and industry innovations. Specific questions that are answered in this report include, but are not limited to, the following:

  • What effects does the decline in new car sales and the economic downturn have on the overall market?
  • How do recent state and local bans on cell phone use and in-car text messaging affect the in-car entertainment market?
  • How does the increase in used auto sales affect the sale of in-car entertainment components?
  • How are automakers affecting the in-car entertainment aftermarket by an increased reliance on all-in-one delivery systems like Ford’s Sync system or Chrysler’s UConnect?
  • What segments of the in-car entertainment market are stagnating, and what can be done to increase activity?
  • What companies are driving innovation in their segments, and how can others learn from their success?
  • What media are industry leaders using to deliver effective marketing campaigns, and what actions need to be taken to improve visibility?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Consumer survey data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Recession, new car sales downturn, contributing to projected market loss
                      • Factory-installed systems dominate market, followed by aftermarket audio
                        • Aftermarket satellite radio receivers drop almost 90% in about four years
                          • National, state and local legislation threatening use of in-car electronics
                            • New car unit sales declining, likely affecting OEM sales, installation
                              • Consumer survey findings
                              • Insights and Opportunities

                                • Offer free or discounted mobile phone headset to cell phone violators
                                  • Incorporate green components into existing telematics systems
                                    • Provide entertainment content in cars that is programmable and varied
                                    • Inspire Insights

                                        • Trend I: Rise of the “Screenager”
                                          • A generation shows a heightened comfort level in front of a screen
                                            • Play is central to generation brought up with video, mobile screens
                                              • Re-examining in-car entertainment as less of a novelty, more of a right
                                                • Trend II: Instant Gratification?
                                                  • There may be no end in sight for the 24/7, on-demand society
                                                    • The future has been erased by the creation of the instant present
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • Recession, new car sales downturn, contributing to projected market loss
                                                            • Figure 1: Total in-vehicle entertainment devices revenues, at current prices, 2005-10
                                                            • Figure 2: Total in-vehicle entertainment devices revenues, at inflation-adjusted prices, 2005-10
                                                        • Factory-Installed Systems

                                                          • Key points
                                                            • Recession expected to force factory-installed sales to drop by about a third
                                                              • Carmakers putting entertainment components into single delivery systems
                                                                • UConnect
                                                                  • Sync
                                                                    • HD radio offered as enhanced feature, alternative to satellite radio
                                                                        • Figure 3: Total factory-installed systems wholesale revenue, 2005-10*
                                                                    • Aftermarket Autosound Equipment

                                                                      • Key points
                                                                        • Aftermarket negatively affected by factory technology, all-in-one GPS
                                                                            • Figure 4: Total aftermarket autosound equipment wholesale revenue, 2005-10*
                                                                          • Aftermarket satellite radio receivers drop almost 90% in about four years
                                                                            • Figure 5: Total wholesale revenue of satellite radio receivers, 2005-10*
                                                                        • Mobile Video

                                                                          • Key points
                                                                            • Mobile video evolving from single to multi-use; threatened by high costs
                                                                                • Figure 6: Total mobile video devices wholesale revenue, 2005-10*
                                                                            • Market Drivers

                                                                              • National, state and local legislation threatening use of in-car electronics
                                                                                • New car unit sales declining, likely affecting OEM sales, installation
                                                                                    • Figure 7: Total U.S. car unit sales, 2003-08
                                                                                    • Figure 8: U.S. unit sales of light vehicles, January-June 2008 and 2009
                                                                                  • Used vehicle sales rising, which may positively affect aftermarket sales
                                                                                      • Figure 9: U.S. sales of used vehicles at new car dealerships, 2001-08
                                                                                  • In-Car Entertainment—Installation

                                                                                    • Key points
                                                                                      • Consumers most likely to install GPS systems themselves
                                                                                          • Figure 10: In-car entertainment installation, July 2009
                                                                                      • Installation—CD Players

                                                                                        • Key points
                                                                                          • Male respondents are more likely to buy, install CD players themselves
                                                                                            • Figure 11: CD player installation, by gender, July 2009
                                                                                          • Drivers aged 18-24 most likely to have CD players in car upon purchase
                                                                                              • Figure 12: CD player installation, by age, July 2009
                                                                                            • Drivers with lower household incomes more likely to install CD players
                                                                                                • Figure 13: CD player installation, by household income, July 2009
                                                                                            • Installation—GPS

                                                                                              • Key points
                                                                                                • Male drivers are more likely than female drivers to install GPS systems
                                                                                                  • Figure 14: GPS installation, by gender, July 2009
                                                                                                • The youngest drivers are most likely to buy, install GPS devices
                                                                                                    • Figure 15: GPS installation, by age, July 2009
                                                                                                  • Drivers with higher household incomes most likely to have GPS systems
                                                                                                      • Figure 16: GPS installation, by household income, July 2009
                                                                                                  • Installation—MP3 Players

                                                                                                    • Key points
                                                                                                      • Young drivers most likely to have, install MP3 players
                                                                                                          • Figure 17: MP3 player installation, by age, July 2009
                                                                                                        • MP3 player purchasing more active among highest income groups
                                                                                                          • Figure 18: MP3 players, by household income, July 2009
                                                                                                      • Installation—Subwoofers

                                                                                                        • Key points
                                                                                                          • Male drivers more likely than women to have subwoofers
                                                                                                            • Figure 19: Subwoofer installation, by gender, July 2009
                                                                                                          • Oldest respondents least likely to have subwoofers installed in vehicles
                                                                                                              • Figure 20: Subwoofer installation, by age, July 2009
                                                                                                            • Highest-income households most likely to purchase cars with subwoofers
                                                                                                                • Figure 21: Subwoofer installation, by household income, July 2009
                                                                                                            • Installation—Amplifiers

                                                                                                              • Key points
                                                                                                                • Male drivers more likely to install amplifiers in their vehicles than women
                                                                                                                  • Figure 22: Amplifier installation, by gender, July 2009
                                                                                                                • Youngest respondent age group most likely to install amplifiers
                                                                                                                    • Figure 23: Amplifier installation, by age, July 2009
                                                                                                                  • Middle-income households most likely to self-install amplifiers in vehicles
                                                                                                                    • Figure 24: Amplifier installation, by household income, July 2009
                                                                                                                • Innovation and Innovators

                                                                                                                  • Special jack allows cell phone users to talk, hands-free, through car radio
                                                                                                                    • Automotive cameras marketed as providing greater security, safety
                                                                                                                      • Singular domain will establish how automotive internet operates into future
                                                                                                                        • Voice-activated text messaging service advocates road safety, ease of use
                                                                                                                        • Advertising and Promotion

                                                                                                                          • Car audio and video promoted mainly through electronic media channels
                                                                                                                            • Rock festival sponsorships generate brand exposure with younger fans
                                                                                                                              • Analysis of in-car entertainment broadcast spots
                                                                                                                                • Driver confidence, ease of use emphasized through GPS navigation spots
                                                                                                                                    • Figure 25: TomTom Go ad, 2009
                                                                                                                                    • Figure 26: Raven Cruizer ad, 2009
                                                                                                                                  • Because delivery systems offer content variety, infinite choices need to be emphasized
                                                                                                                                    • Figure 27: XM Satellite Radio ad, 2008
                                                                                                                                    • Figure 28: XM Satellite Radio ad, 2008
                                                                                                                                • Vehicle Ownership

                                                                                                                                  • Key points
                                                                                                                                    • Mid-sized cars most popular model among car buyers
                                                                                                                                      • Figure 29: Vehicle ownership, by gender, July 2009
                                                                                                                                    • About a quarter of car drivers in all age groups prefer to drive mid-size cars
                                                                                                                                        • Figure 30: Vehicle ownership, by age, July 2009
                                                                                                                                      • Higher-income households are more likely to pick larger cars, SUVs
                                                                                                                                          • Figure 31: Vehicle ownership, by household income, July 2009
                                                                                                                                      • Weekly Vehicle Participation

                                                                                                                                        • Key points
                                                                                                                                          • Most respondents spend five or more hours per week in their cars
                                                                                                                                              • Figure 32: Weekly vehicle participation, by gender, July 2009
                                                                                                                                            • Under-35s likely to spend 11 hours or more in cars
                                                                                                                                                • Figure 33: Weekly vehicle participation, by age, July 2009
                                                                                                                                              • Drivers with higher household incomes spend more time in their cars
                                                                                                                                                  • Figure 34: Weekly vehicle participation, by household income, July 2009
                                                                                                                                              • In-Car Entertainment—Frequency

                                                                                                                                                • Key points
                                                                                                                                                  • Satellite radio popular among those who have it
                                                                                                                                                      • Figure 35: In-car entertainment frequency, July 2009
                                                                                                                                                    • CD player frequency by age
                                                                                                                                                      • Figure 36: CD player frequency, by age, July 2009
                                                                                                                                                    • GPS frequency by gender
                                                                                                                                                      • Figure 37: GPS frequency, by gender, July 2009
                                                                                                                                                    • GPS frequency by age
                                                                                                                                                      • Figure 38: GPS frequency, by age, July 2009
                                                                                                                                                    • MP3 adaptor frequency by age
                                                                                                                                                      • Figure 39: MP3 player adaptor frequency, by age, July 2009
                                                                                                                                                    • Amplifier frequency by gender
                                                                                                                                                      • Figure 40: Amplifier frequency, by gender, July 2009
                                                                                                                                                    • Amplifier frequency by age
                                                                                                                                                      • Figure 41: Amplifier frequency, by age, July 2009
                                                                                                                                                    • Subwoofer frequency by age
                                                                                                                                                      • Figure 42: Subwoofer frequency, by age, July 2009
                                                                                                                                                    • Subwoofer frequency by gender
                                                                                                                                                      • Figure 43: Subwoofer frequency, by gender, July 2009
                                                                                                                                                  • In-Car Entertainment—Attitudes

                                                                                                                                                    • Key points
                                                                                                                                                      • Male respondents prefer to listen to their own music over radio
                                                                                                                                                          • Figure 44: In-car entertainment attitudes, by gender, July 2009
                                                                                                                                                        • Under-25s seem most comfortable with in-car entertainment
                                                                                                                                                            • Figure 45: In-car entertainment attitudes, by age, July 2009
                                                                                                                                                          • Respondents in higher-wealth households favor satellite radio, GPS
                                                                                                                                                            • Figure 46: In-car entertainment attitudes, by household income, July 2009
                                                                                                                                                        • Race and Hispanic Origin

                                                                                                                                                          • Key points
                                                                                                                                                            • Whites, blacks drive mid-size cars most, Hispanics prefer compacts most
                                                                                                                                                              • Figure 47: Vehicle ownership, by race or Hispanic origin, July 2009
                                                                                                                                                            • White respondents less likely to spend long hours in their cars
                                                                                                                                                                • Figure 48: Weekly vehicle participation, by race or Hispanic origin, July 2009
                                                                                                                                                              • Black respondents comfortable with in-car entertainment options
                                                                                                                                                                  • Figure 49: In-car entertainment attitudes, by race or Hispanic origin, July 2009
                                                                                                                                                                • Blacks show greatest potential for long-term CD player usage, loyalty
                                                                                                                                                                  • Figure 50: CD player frequency, by race or Hispanic origin, July 2009
                                                                                                                                                                • Hispanics use GPS systems more frequently than whites, blacks
                                                                                                                                                                  • Figure 51: GPS frequency, by race or Hispanic origin, July 2009
                                                                                                                                                                • Hispanics reliant most on MP3 players in cars; blacks present opportunity
                                                                                                                                                                  • Figure 52: MP3 player adaptor frequency, by race or Hispanic origin, July 2009
                                                                                                                                                                • Black respondents most frequent users of amplifiers
                                                                                                                                                                  • Figure 53: Amplifier frequency, by race or Hispanic origin, July 2009
                                                                                                                                                              • Cluster Analysis

                                                                                                                                                                  • Hi-Drivers
                                                                                                                                                                    • Medium Pacers
                                                                                                                                                                      • Quiet Drivers
                                                                                                                                                                        • Cluster characteristics
                                                                                                                                                                          • Figure 54: In-car entertainment clusters, July 2009
                                                                                                                                                                          • Figure 55: Vehicle ownership, by in-car entertainment clusters, July 2009
                                                                                                                                                                          • Figure 56: Vehicle frequency, by in-car entertainment clusters, July 2009
                                                                                                                                                                          • Figure 57: In-car entertainment component preference, by in-car entertainment clusters, July 2009
                                                                                                                                                                          • Figure 58: Consumer attitudes, by in-car entertainment clusters, July 2009
                                                                                                                                                                        • Cluster demographics
                                                                                                                                                                          • Figure 59: In-car entertainment clusters, by gender, July 2009
                                                                                                                                                                          • Figure 60: In-car entertainment clusters, by age, July 2009
                                                                                                                                                                          • Figure 61: In-car entertainment clusters, by income, July 2009
                                                                                                                                                                          • Figure 62: In-car entertainment clusters, by race, July 2009
                                                                                                                                                                          • Figure 63: In-car entertainment clusters, by Hispanic origin, July 2009
                                                                                                                                                                        • Cluster methodology
                                                                                                                                                                        • Appendix: Other Useful Consumer Tables

                                                                                                                                                                          • MP3 installation by gender
                                                                                                                                                                            • Figure 64: MP3 player installation, by gender, July 2009
                                                                                                                                                                          • CD player frequency by gender
                                                                                                                                                                            • Figure 65: CD player frequency, by gender, July 2009
                                                                                                                                                                          • CD player frequency by household income
                                                                                                                                                                            • Figure 66: CD player frequency, by household income, July 2009
                                                                                                                                                                          • GPS frequency by household income
                                                                                                                                                                            • Figure 67: GPS frequency, by household income, July 2009
                                                                                                                                                                          • MP3 player adaptor frequency by household income
                                                                                                                                                                            • Figure 68: MP3 player adaptor frequency, by household income, July 2009
                                                                                                                                                                          • MP3 player adaptor frequency by gender
                                                                                                                                                                            • Figure 69: MP3 player adaptor frequency, by gender, July 2009
                                                                                                                                                                          • Amplifier frequency by household income
                                                                                                                                                                            • Figure 70: Amplifier frequency, by household income, July 2009
                                                                                                                                                                          • Subwoofer frequency by household income
                                                                                                                                                                            • Figure 71: Subwoofer frequency, by household income, July 2009
                                                                                                                                                                          • Subwoofer frequency by race or Hispanic origin
                                                                                                                                                                            • Figure 72: Subwoofer frequency, by race or Hispanic origin, July 2009
                                                                                                                                                                        • Appendix: Trade Associations

                                                                                                                                                                          Companies Covered

                                                                                                                                                                          • AB Volvo
                                                                                                                                                                          • Alliance Of Automobile Manufacturers, Inc.
                                                                                                                                                                          • Alpine Electronics U.S.A.
                                                                                                                                                                          • Audi of America Inc
                                                                                                                                                                          • Automotive Aftermarket Industry Association
                                                                                                                                                                          • Automotive Industry Action Group (AIAG)
                                                                                                                                                                          • BMW of North America, LLC
                                                                                                                                                                          • Chrysler LLC
                                                                                                                                                                          • Consumer Electronics Association
                                                                                                                                                                          • Facebook, Inc.
                                                                                                                                                                          • Ferrari S.p.A.
                                                                                                                                                                          • Flickr
                                                                                                                                                                          • Ford Motor Company (USA)
                                                                                                                                                                          • Greenfield Online
                                                                                                                                                                          • Hyundai Motor America
                                                                                                                                                                          • Kia Motors America, Inc.
                                                                                                                                                                          • Land Rover North America, Inc.
                                                                                                                                                                          • Lincoln Mercury
                                                                                                                                                                          • Maserati S. p. A.
                                                                                                                                                                          • Mazda North American Operations
                                                                                                                                                                          • Mercedes-Benz USA
                                                                                                                                                                          • Mitsubishi Motors North America, Inc.
                                                                                                                                                                          • MySpace.com
                                                                                                                                                                          • National Automobile Dealers Association (NADA)
                                                                                                                                                                          • Nissan North America, Inc.
                                                                                                                                                                          • OnStar Corporation
                                                                                                                                                                          • Porsche Cars North America, Inc.
                                                                                                                                                                          • Saab Cars North America
                                                                                                                                                                          • Subaru of America, Inc.
                                                                                                                                                                          • Suzuki Motor Corporation
                                                                                                                                                                          • Toyota Motor Corporation USA
                                                                                                                                                                          • Twitter, Inc.
                                                                                                                                                                          • U.S. Bureau of Labor Statistics
                                                                                                                                                                          • Volkswagen of America, Inc.
                                                                                                                                                                          • Walgreen Co
                                                                                                                                                                          • Walmart Stores (USA)
                                                                                                                                                                          • YouTube, Inc.

                                                                                                                                                                          In-car Entertainment - US - September 2009

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