North American Infotainment System Markets

Published by: Frost & Sullivan

Published: Feb. 11, 2005

Table of Contents

Abstract

It is being observed that consumers that are accustomed to digital entertainment systems are increasingly demanding home theater-level infotainment experience from their vehicles. Participants of the automotive infotainment market will have to step up their research and development (R&D) efforts and offer innovative solutions at attractive price points, if they are to generate demand. Improving customer awareness about the options available is compelling manufacturers to incorporate attractive feature sets with high system and architecture integration. Since most of these technologies are new, they are likely to be expensive. Nevertheless, high hardware integration and strategic partnerships with technology leaders could bring about technical innovations, reduce costs, and help develop flexible and easily scalable technology platforms.

This Frost & Sullivan research service provides an in-depth analysis of the North American automotive infotainment system markets. It examines the various industry challenges as well as the market drivers and restraints. It also provides strategic recommendations for manufacturers to overcome the market hurdles. The research enables companies to align their positioning strategies to benefit from the changing markets and obtain maximum return on investment.

Demand for Greater Infotainment Value Drives Market Growth

With a rise in the average annual miles driven per vehicle, there has been a simultaneous growth of the automotive infotainment industry, as vehicle owners and buyers are demanding greater infotainment value from their vehicles. "The increasing popularity of home theater systems, the Internet, and satellite television and radio is permeating all consumer demographics, creating greater consumer awareness of infotainment systems," says the analyst of this research. Consumers are now demanding advanced infotainment systems and solutions for their vehicles, helping the market expand beyond high-end vehicles to other vehicle segments.

Vehicle manufacturers, in an effort to influence purchase decisions, are aggressively using infotainment systems as vehicle differentiators and are seeing increased uptake of their products. Aftermarket retailers and distributors are also capitalizing on this increased demand for infotainment systems and have been deriving greater margins due to higher retail prices. These trends are presenting rapid, organic growth opportunities for the North American automotive infotainment system markets.

Providing Cutting-edge Features and Applications at Competitive Prices to Encourage System Adoption

System suppliers aim to develop innovative infotainment system solutions, which, apart from being cost competitive, provide consumers with the most pertinent application and feature-sets incorporating advanced and effective human machine interfaces (HMIs). Since most consumers are not familiar with the operations of such systems, they could be distracted while driving. The new class of systems is expected to address this problem by ensuring end-user comfort and ease of use.

"Automakers and consumers seek sophisticated HMIs that demand minimal driver intervention for greater driving safety," notes the analyst. "The development of convenient and easy points of control, single-knob controls, touch-screen operation, voice-based HMIs, and other measures has been aimed at improving the HMIs." Enhanced R&D activities by system manufacturers are expected to lead to the creation of intelligent and user-friendly infotainment systems aimed at enticing customers with their ergonomic styling, advanced human machine interfaces, feature sets and value proposition.

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