Who says you can't take it with you? Cars are turning into entertainment centers
There's a reason all those car ads on TV sound like personal-computer pitches. Automakers, aided by a slew of computer and consumer electronics players, are working hard to replicate in their vehicles the same kinds of integrated entertainment centers that car buyers have in their homes.
When Chrysler started working on its new minivan several years ago, its engineers, designers, and marketers spent days with minivan families, hanging out in their living rooms and riding around with them to better understand their lifestyles. After that, the designers loaded up the cabins with gadgets that sync with the car's stereo: a choice of satellite TV and radio, video game systems, and a library of digital music. The result? One-fifth of customers buying a Town & Country minivan this year choose to add audio and video devices worth $470.
Some luxury brands are going further, integrating Web-based traffic information as well as high-end entertainment into the stereo. Meanwhile, the consumer electronics industry is pushing car companies to make it easy for drivers to bring their own phones, iPods, and videos into the car—and not have all of these gizmos rattling around in cupholders or hanging off the windshield. The techies are also developing standards that will allow different technologies and services to be coordinated by one onboard computer and piped through the dashboard.
"There's a pot of gold here," says Consumer Electronics Assn. (CEA) President Gary Shapiro. "Take everything that's cool in your house and put it in your car." In 2008, the CEA predicts, sales of video gear, satellite radio and television, DVD players, and audio systems by carmakers or independent retailers should hit $10 billion, nearly double what consumers spent in 2003.
Several different trends are behind this rush to integrate every living room comfort into the dashboard. On the industry side, selling autos is tougher than ever, and manufacturers sorely need new bragging points beyond fuel economy, reliability, or horsepower.
As for consumers, most have come to expect that they can carry their tunes and videos wherever they go. Better hands-free technology may reduce the chances that drivers will barrel into the car ahead while scanning their video display for a Van Halen tune. And speech recognition technology has advanced to the point where drivers can talk to devices without feeling they're addressing a non-native speaker with a hearing problem. "The consumer electronics industry moves at light speed," says Michael Kane, Chrysler's director of advanced technology strategy. "We metal benders are struggling to keep up."
New partnerships are evolving that could allow different kinds of companies to share access to a vehicle's proprietary computer system. An initiative called MOST (Media Oriented Systems Transport) has rallied carmakers and electronics companies behind a set of technical standards that let any device plug into a car's computer and audio system without disturbing the vehicle's core electronics. MOST originated with German carmakers Daimler (DAI) and BMW, but Audi (VLKAY), Ford's (F) luxury brands, Toyota, (TM) and Hyundai have signed up, too.
Ford is relying on Microsoft (MSFT) to help integrate the car's electronics, realizing entertainment delivery matters almost as much to customers as a car's mechanical performance. With Microsoft's system, called Sync, drivers can use voice commands to manage an extensive music library, mobile-phone calls, and text messaging. Drivers of Mercedes-Benz's new $40,000 C-class can use voice to change tunes, call up traffic data, or access maps. And next year, even buyers of a $16,000 Ford Focus will be able to call up real-time traffic information of the sort that Mercedes offers on many cars.
Credit Chrysler's integration play for luring buyers like Kitty Dickson. The 39-year-old mother lives in Detroit's tony suburb of Birmingham, where she often totes around her two kids, ages 2 and 5, along with their three cousins, who are 10, 12, and 14. Keeping that brood entertained was tough with one video screen and a DVD player in her old Chrysler minivan. Her new 2008 Town & Country has a video screen in each row and more options, such as three kids' channels coming in on satellite TV.
For most drivers, electronic integration is still a distant dream. In one-third of cars, the owner can't even remove the stereo system without carving up the dashboard or disrupting electronic functions. And some new models hit showrooms with a Bluetooth system that can't talk to all cell phones.
Even these gaps, however, bring opportunities to tech startups. Paris-based Parrot sells compact $100 car systems that let any Bluetooth phone connect to any car stereo. Another Parrot unit does the same for iPods and MP3 players. Mytech of Austin, Tex., has managed to pack that same functionality into a tiny 4-by-6-inch box.
The next big battleground will be streaming media. Mobile-television service is limited right now. Sirius Satellite Radio (SIRI), for instance, offers just three satellite-TV channels in an exclusive deal with Chrysler through July, 2008. Chrysler's Kane says news, sports, and movie deals are in the works, though no specific agreements are in place.
And soon drivers won't even need a satellite receiver to receive shows. Cell phones running on the fastest networks, such as EV-DO from Verizon Wireless and Sprint Nextel (S), can already pull in Net videos, TV shows, and even movies. In theory, that content could be zipped to a car's video screens through Bluetooth or some other connection, says Sascha Simon, director of telematics at Mercedes-Benz U.S. Advanced wireless systems like WiMAX—a longer-range, faster version of Wi-Fi—should start catching on by 2009, allowing greater access to Web-based programming in moving vehicles.
Such developments are bound to please Amante Bustamante, a 35-year-old technology consultant with two kids in the Washington (D.C.) area. Long loyal to Japanese and European auto brands, he recently bought the new Town & Country, his first Chrysler, entirely because it offered multiple video screens and a smorgasbord of entertainment options. Now, Bustamante says, his kids can watch their shows with wireless headphones in the rear seats while he and his wife can listen to '80s tunes on satellite radio. "The driver has to be entertained, too," he says. "I don't want to hear cartoons coming out of my speaker up front."
Surfing at highway speed
Google's (GOOG) decision to bid in next month's wireless spectrum auction focused attention on how Net-based media will get delivered to cars. A Sept. 26 eWeek article titled "Providers Ogle Google Wireless Possibilities" mused that Google might throw its weight behind an emerging high-speed wireless technology called WiMAX, which resembles Wi-Fi but provides faster data speeds and could be accessed on the road. But the article also questions whether the spectrum being auctioned is ideal for WiMAX.
Wireless hits the road
CMP Media's TechWeb noted on Oct. 5 that some areas of the U.S. aren't waiting for large companies to deliver WiMAX services. In Texas, startup Xanadoo has signed up 12,000 WiMAX subscribers. Another venture, Razzolink, has begun setting up WiMAX service in California. Razzolink President John Iacopi says he is able to sit in the passenger seat of his car and surf the Net at 55 mph. But the main target market for both services is homeowners seeking an alternative to cable or DSL service.