Car Makers Ignore $1.7Billion iPod & MP3 Opportunity

Strategy Analytics: Over 70 Percent of New Car Buyers Own or Intend to Buy MP3 Player. 47 percent of new car buyers across the US, UK, Germany and France already own an iPod or MP3 player, and that 35 percent are planning to buy a digital music player within the next year. Yet, 48 percent are not currently interested in an iPod interface when they buy their next new car.

Over a third of new car buyers who own MP3 players want to play their MP3 music collection through the car audio system. Although burned CD is the most preferable method for bringing digital music into their cars, 36 percent want to connect their MP3 player with their car audio system. There are regional differences, but overall the demand for playing in-vehicle MP3 music is very strong across the US and Europe.

Joanne Blight, Director in the Automotive Practice, notes, Our survey shows that there is a major gap between demand and supply. Just as we've seen with portable navigation, car makers are again running the risk of delivering a major automotive opportunity gift straight to the aftermarket suppliers. Aftermarket MP3 solutions start at around $50, whereas car maker solutions start at hundreds of dollars and, generally, OEM availability and promotion of automotive digital music solutions is extremely poor. If car makers react quickly by launching MP3 connectivity in the correct target car models, set attractive price points, and promote the benefits of having integrated solutions, she concludes, significant new revenue streams can stay with the manufacturer, rather than being passed directly to the aftermarket vendor. Automotive Consumer Survey - Opportunity Implications for Automotive Multimedia and Information

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