April 27, 2007
Bad News for HD Radio: Automakers Still Considering Rollout
One of the biggest factors in widespread HD Radio adoption is factory-installed car radios: iBiquity has struck no deals with high-selling automakers, and that's a problem. This Reuters article notes that GM and DaimlerChrysler have made no commitment--and they're saying that publicly. The article estimates that it costs $45 to equip a car with an HD Radio-capable receiver, which must be the incremental cost over a plain AM/FM or AM/FM/CD system. iBiquity notes that it has a number of automaker partners, most unannounced, but they don't include the big three in Detroit.
Satellite radio operators have used massive subsidies and revenue sharing to get XM and Sirius receivers installed as factory or dealer options with several months of free service. If car buyers sign up for service, the carmaker receives some of that revenue stream. Because the two satellite operators (which may merge pending regulatory issues) spend so much to acquire each customer, it's worth their while to get the radios preinstalled in cars.
iBiquity is on a different side of this equation. While they have offered rebates over the last year for different amounts on receivers in the market, including car audio systems, iBiquity doesn't make equipment. (Sirius and XM have different arrangements for how they make and license gear, but they have more direct control and interest in the devices' distribution.)
iBiquity and its manufacturing partners must get carmakers to get on board, and it's much more likely going to devolve to money not technology. If the cost were lower and iBiquity ate some of it in the interest of growing demand and reducing cost, carmakers would be happy to promote HD Radio as a feature. Right now, carmakers can gain a revenue stream from satellite radio because of subscriber fees. iBiquity and manufacturers have to figure out how to create a sweet enough deal to make it worthwhile to automakers.
I would say that demand among car buyers would pull radios into cars, but it's not so. With so few HD Radio receivers in homes and cars right now, there's nowhere near the kind of interest that would make Detroit (or Japan) change its mind yet.
January 7, 2007
BMW Commits to HD Radio Option on All Models
BMW will offer HD Radio in all models: This a $500 option, but it's factory installed when requested on all 2007 model year cars. BMW had previously offered HD Radio receivers for just 7 and 6 series 2006 model years. It's a small win, as iBiquity has said that eight other automakers are also considering various HD Radio options.