Satellite radio: Is the market starting to listen?

Satellite radio: Is the market starting to listen?

By 2014, global shipments of satellite radios will rise to 8.9 million units, nearly double the 4.6 million in 2007, iSuppli predicts

Thursday, August 14, 2008

USA: Despite a six-year market presence, there remains considerable confusion surrounding satellite and digital radio due to the introduction of multiple digital radio standards.

However, iSuppli Corp. believes that market changes, including the merger of the two principal satellite broadcasters in the United States, will allow vehicle manufacturers to be more confident about supporting digital radio in their development roadmaps, boosting sales in the coming years.

By 2014, global shipments of satellite radios will rise to 8.9 million units, nearly double the 4.6 million in 2007, iSuppli predicts. In 2008, shipments are expected to rise by 13.3 percent to reach 5.2 million units.

The attached figure presents iSuppli’s forecast of worldwide OEM satellite radio shipments through the year 2014.

Source: iSuppli

US satellite radio: After the merger
In March, the US Department of Justice (DOJ) ruled in favor of a merger between satellite radio operators Sirius and XM Satellite Radio Inc.

“This is good news for strategic planners in the automotive business, as well as top-tier and aftermarket suppliers that have spent the last 18 months ‘on hold’ pending this merger,” said Richard Robinson, principal analyst for automotive electronics, for iSuppli.

“Satellite radio providers Sirius and XM have retained end-to-end control of their value chain, from hardware to content. This has allowed them to develop an entire ecosystem with the freedom to push through proprietary broadcast and receiver standards. In contrast, most other digital broadcast standards have required significant buy-in from third parties. The result has been patchy acceptance of most other digital radio formats. With the merger approved, Sirius and XM now are free to expand their business using their successful business model to a wider audience.”

BMW drives HD radio ahead
iSuppli also is very encouraged by BMW's decision to roll out High Definition (HD) radio as a standard feature in all its US vehicles starting in September.

“iSuppli's clients, which include semiconductor suppliers and top-tier automotive equipment makers, realize that until car makers begin to offer digital radio technologies as standard features in vehicle head units, the additional cost of installing digital radio as an option will continue to be a deterrent to wider adoption,” Robinson said.

Source: iSuppli, USA

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