On-the-go electronics are on the grow

Portability is the trend this year, in everything from navigation systems to iPod docking stations.

"To purchase two vehicles with navigation systems might set you back almost $5,000," says Mark Miller, president of Westminster Speed and Sound, Westminster, Md. "If they get one portable unit, there's cost savings."

Mark Boyle, director of aftermarket marketing for Van Buren Township, Mich.-based Visteon, agrees with the portability trend.

"It's a win for consumers if they go in looking for an in-vehicle player and go out with something they can use anywhere, for essentially the same cost," he says. "The accessories piece of the pie — for headphones, carrying cases, etc. — is enormous. Look at what iPod alone has done to the market. Vehicle integration is a big piece to value-add for jobbers."

Miller is on the board of the Indianapolis-based Mobile Enhancement Retailers Association (MERA). He says wireless connectivity will continue to drive automotive consumer electronics. After all, who wants to be wired to their car?

With the cost of Bluetooth wireless systems going down thanks to demand, more products will incorporate Bluetooth technology in their hands-free cell phone headsets, PDAs and laptops.

But Bluetooth isn't the only wireless game in town — other evolving technologies will soon be on the scene.

WiMAX (Worldwide Interoperability for Microwave Access) is coming and will enable delivery of last-mile wireless broadband access.

Published reports note that Intel will deliver its first WiMAX PC Card by the end of the year. The manufacturer believes WiMAX technology will spread like Wi-Fi wireless LANs, a linked system in a local area network that uses high-frequency radio signals to transmit and receive data over distances of a few hundred feet. However, Intel has come under fire for overhyping the new technology. Similarly, ZigBee is expected to hit the general marketplace in 2008 (currently, it can only be used by authorized members of a fee-based alliance). But whether these technologies' popularity will soar like a DVD or crash like a Beta tape remains to be seen.

"The evolution of wireless will move eventually to WiMAX and ZigBee," the MERA report states.

Hot – or not?

One segment that may be losing momentum, however, is mobile video.

"It's an industry dominated on the OEM side now," says Miller. "It wasn't what it was two years ago."

Miller notes that nearly every new vehicle on the market today offers video capability, with the exception of the entry models. This is miles away from what the market was offering only a couple years ago, when just top-of-the-line models offered the video option.

There is hope for a rejuvenation of this market segment, however, with new tie-ins. For example, Boyle says the Visteon Dockable Entertainment featuring Game Boy Advance debuted in August.

"We know the demographics of the average DVD watcher in vehicles is about 5 to 15 years old. They can play their Game Boy Advance cartridges using a wireless controller with infrared technology," he explains. "Best of all, it's portable so they can take that 10-inch screen with them to the hotel room, the house, whatever their destination."

Boyle notes that the partnership with Nintendo will benefit aftermarket retailers: The point-of-purchase display is heavy on consumer-friendly Game Boy graphics.

"The kit includes posters, banners and a stand-up 'Mario' figure that's about 5 foot tall and 3-and-a-half feet wide," he says. "We also have inside window clings and a binder for dealers to use — how to install, use and leverage Nintendo's trademarks and properties. There are also ad slicks on a CD-ROM for stores to use in their advertisements."

But automotive aftermarket electronics aren't just about entertainment. Miller notes that he has seen enormous demand for another type of electronics: remote starters. "With the cold seasons we have, this is a definite trend," he adds. "We sold over 300 of them last year."

Radio trends

Like its television sibling, high-definition radio is another fad to pay attention to.

"HD radio takes an FM signal and enhances it to CD quality. It enhances AM signal to, well, FM quality," explains Boyle, noting that Visteon began installing optional HD radio units on the BMW 5, 6 and 7 series in January.

iBiquity Digital Corp. developed the technology, and its use is slowly becoming more widespread.

"There will be some action in HD units down the road," predicts Miller, adding that the current costs may be prohibitive for some consumers.

Satellite radio is currently in the spotlight, and Miller notes that both permanently installed and portable units are selling well.

"XM has a portable unit that picks up the streaming audio plus has flash drive storage," he says, "while Sirius has one that stores pre-recorded audio but not live. They're supposed to be working on it."

"The satellite market is interesting; everyone is keeping a watch on it," agrees Boyle.

In addition, Miller notes the beginnings of a trend where consumers choose to leave their factory-installed radios intact and instead boost speakers and amplifiers for their systems.

Staying current

Boyle says aftermarket retailers should continue to step up to the plate in the mobile electronics arena, and not let all those dollars go to the major electronics retailers.

Jobbers need to communicate their professional expertise to their customers. "There's a definite value in that 'We really understand the vehicle, and we know how to integrate this into your vehicle,'" he says.

The trick, Miller adds, is staying current on installation. "The difficulty level in installing items like remote starts literally triples every year for new models, until an integration unit is introduced," he says. "The labor side is getting harder to find more qualified people to do the work."

However, it's worth the search. As technology infiltrates every area of consumers' lives, aftermarket businesses that don't cater to "techies" may find themselves left behind. What's more, technology is constantly changing, leading consumers to upgrade quickly.

Whether they buy their automotive technology at an aftermarket retailer or an electronics retailer depends on how much aftermarket retailers educate themselves on the technology and the technology needs of their customers.