ANALYSIS-MARKET-TRENDS
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Automotive infotainment technology shifts upscale in 2008
The year 2008 is expected to be an exciting period for the global
automotive infotainment systems market, as car makers and their
suppliers focus on more advanced electronics to lure customers,
according to iSuppli Corp.
“Much of the automotive market is playing catch-up, with many car makers this year seeking to upgrade their infotainment systems to match Ford's SYNC technology,” said Richard Robinson, principal analyst for automotive electronics at iSuppli.
“Automakers also are playing cost-down—and are pressuring their tier-one electronic systems suppliers to come up with innovative solutions that reduce costs and boost feature sets.”
Global combined OEM and aftermarket revenue for automotive infotainment systems is expected to rise to $39.8 billion in 2008, up 7.9 percent from $36.98 billion in 2007.
The attached Figure presents iSuppli's forecast for automotive infotainment system revenue for 2006 through 2012.
Systems market: More features mean healthy growth
Overall, 2007 was a good year for automotive infotainment systems, with the market generating solid growth. Combined revenue for automotive infotainment systems rose by 13.5 percent compared to 2006.
Portable Navigation Devices (PNDs) were the strongest-growing segment in infotainment in 2007, with revenue rising 54.4 percent compared to 2006.
However, storm clouds are gathering over the PND market, with questions arising over whether profitability can be maintained amid a freefall in Average Selling Prices (ASPs) and a wholesale bailout among investors due to profit warnings and slowing sales.
Global PND market revenue growth will slow in 2008, but it is still expected to come in at a robust 18.2 percent.
Revenue from head-unit shipments rose 6.9 percent in 2007, with the vehicle OEM sector in particular demanding higher feature specifications and more integrated designs. Revenue growth in this area will slow to 5.6 percent in 2008.
Infotainment semiconductors: A good place to be
Based on direct survey input from silicon suppliers, iSuppli estimates 18 percent annual growth in 2007 for automotive infotainment-oriented, application-specific semiconductors, such as Application-Specific Standard Products (ASSPs) and Programmable Logic Devices (PLDs). The combined revenue of the Top-2 suppliers—No. 1 STMicroelectronics and No. 2 NXP Semiconductors—accounted for nearly a quarter of total market share in 2007, with both companies able to supply a broad range of automotive-grade silicon to the infotainment market.
Automotive infotainment semiconductor revenue is expected to rise by 8.5 percent in 2008.
Satellite Radio: Someone is listening
The year 2007 was a holding period for satellite-radio chipset providers, with silicon revenue remaining largely flat compared to 2006 levels. However, iSuppli believes that the U.S. Department of Justice's decision to allow the merger between Sirius and XM Radio is good news for the future of satellite radio—and in particular the two main suppliers of satellite radio chipsets: STMicroelectronics and Infineon Technologies AG.
In order to reduce production costs, the newly merged satellite radio company is likely to require silicon providers to offer solutions that are capable of utilizing the services of either satellite format. Currently, no such integrated chipset exists. However, the industry's increased focus on providing a single integrated solution will remove the frustration felt by the current silicon providers who follow isolated manufacturing and development paths, with inevitable waste and duplication in the chip development process.
Global Automotive Infotainment System Revenue Forecast, 2006-2012 (Revenue in Millions of U.S. Dollars)
“Much of the automotive market is playing catch-up, with many car makers this year seeking to upgrade their infotainment systems to match Ford's SYNC technology,” said Richard Robinson, principal analyst for automotive electronics at iSuppli.
“Automakers also are playing cost-down—and are pressuring their tier-one electronic systems suppliers to come up with innovative solutions that reduce costs and boost feature sets.”
Global combined OEM and aftermarket revenue for automotive infotainment systems is expected to rise to $39.8 billion in 2008, up 7.9 percent from $36.98 billion in 2007.
The attached Figure presents iSuppli's forecast for automotive infotainment system revenue for 2006 through 2012.
Systems market: More features mean healthy growth
Overall, 2007 was a good year for automotive infotainment systems, with the market generating solid growth. Combined revenue for automotive infotainment systems rose by 13.5 percent compared to 2006.
Portable Navigation Devices (PNDs) were the strongest-growing segment in infotainment in 2007, with revenue rising 54.4 percent compared to 2006.
However, storm clouds are gathering over the PND market, with questions arising over whether profitability can be maintained amid a freefall in Average Selling Prices (ASPs) and a wholesale bailout among investors due to profit warnings and slowing sales.
Global PND market revenue growth will slow in 2008, but it is still expected to come in at a robust 18.2 percent.
Revenue from head-unit shipments rose 6.9 percent in 2007, with the vehicle OEM sector in particular demanding higher feature specifications and more integrated designs. Revenue growth in this area will slow to 5.6 percent in 2008.
Infotainment semiconductors: A good place to be
Based on direct survey input from silicon suppliers, iSuppli estimates 18 percent annual growth in 2007 for automotive infotainment-oriented, application-specific semiconductors, such as Application-Specific Standard Products (ASSPs) and Programmable Logic Devices (PLDs). The combined revenue of the Top-2 suppliers—No. 1 STMicroelectronics and No. 2 NXP Semiconductors—accounted for nearly a quarter of total market share in 2007, with both companies able to supply a broad range of automotive-grade silicon to the infotainment market.
Automotive infotainment semiconductor revenue is expected to rise by 8.5 percent in 2008.
Satellite Radio: Someone is listening
The year 2007 was a holding period for satellite-radio chipset providers, with silicon revenue remaining largely flat compared to 2006 levels. However, iSuppli believes that the U.S. Department of Justice's decision to allow the merger between Sirius and XM Radio is good news for the future of satellite radio—and in particular the two main suppliers of satellite radio chipsets: STMicroelectronics and Infineon Technologies AG.
In order to reduce production costs, the newly merged satellite radio company is likely to require silicon providers to offer solutions that are capable of utilizing the services of either satellite format. Currently, no such integrated chipset exists. However, the industry's increased focus on providing a single integrated solution will remove the frustration felt by the current silicon providers who follow isolated manufacturing and development paths, with inevitable waste and duplication in the chip development process.
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