Young drivers prefer infotainment systems linked to smartphones
Auto CD players are starting to look like excess baggage.
When General Motors rolls out the 2013 Chevrolet Sonic RS in the United States this summer, the car will feature an optional MyLink infotainment system with a 7-inch display but no CD player.
MyLink, which Chevrolet introduced last year, lets motorists make hands-free phone calls, listen to MP3 music and get route guidance by linking their smartphones to the vehicle's infotainment system.
Infotainment systems combine audio, navigation and a growing list of Internet-connected applications.
Shedding the CD player is part of a larger trend in automotive infotainment. Content and computing power are migrating to smartphones. Robust smartphones can channel music, navigation and other applications to relatively simple and low-cost onboard infotainment systems in the center stack.
The Sonic RS debuted last week at the Detroit auto show. The 2013 Chevrolet Spark, which also will feature MyLink in upscale trim levels, debuted in November at the Los Angeles Auto Show.
"We asked potential Sonic and Spark customers what they were looking for in infotainment," said Sara LeBlanc, MyLink's global infotainment program manager. "They were very worried about cost. They said to us: 'Get rid of the CD player. We don't use it.'"
To hold costs down, GM also didn't include its voice-recognition software -- available in other MyLink-equipped models -- in the Sonic and Spark. But motorists can still make voice-activated calls if their smartphones offer the feature. GM has not announced MyLink pricing for the Sonic or Spark. But Ford Motor Co.'s rival Sync system, priced at $295 to $395, offers a hint.
Automakers want to get rid of optical drives -- that is, CD or DVD players -- because they are expensive and appeal mainly to older motorists, says John Canali, an analyst with Stratacom Inc., a research company in Cupertino, Calif.
Canali estimates that North American sales of CD-less infotainment systems in North America will rise from 331,000 units this year to 12.1 million units in 2018.
As the baby boomer generation dies off, CD players also will die. But that will take a while, Canali says.
"Consumers with the most disposable incomes, i.e. old consumers, are the ones that still use CDs," he wrote in an e-mail. "Still, we believe that automakers will start offering [CD-less] head units in some segments to appeal to younger drivers."
Canali believes infotainment systems such as MyLink and Ford Sync soon will be available in virtually every vehicle sold in the United States. But if the Sonic and Spark are any indication, that could be a mixed bag for suppliers.
An infotainment package needs an operating system, so vendors such as QNX, which designed MyLink's operating system, and Microsoft will be in demand.
Likewise, content providers such as Pandora, which created the music service available on MyLink and Ford Sync, can compete for a wider audience as automakers approve their apps.
And chip makers such as Freescale Semiconductor will generate sales as infotainment systems require more sophisticated semiconductors.
But hardware suppliers could see their revenues stagnate as automakers opt for inexpensive components.
The Spark's display, for example, is a low-tech unit that draws on the smartphone's memory and computing power.
This reliance on generic hardware will become a long-term trend, Canali predicts. Automakers will get their software and computer chips from top-shelf suppliers, but much of their infotainment hardware will come from low-cost Asian vendors.
Canali concludes: "That will put a lot of pressure on traditional Tier 1 suppliers."
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