Satellite Digital Radio Industry To Flourish, New Study Predicts

Autoparts Report, May 3, 2001

Revenues from satellite-based digital audio radio services (SDARS) will reach $350 million by 2006, according to a new study. The study, "The Digital Car: A Strategic View of Global In-Vehicle Communications Technologies and Next-Generation Telematics Systems," from Allied Business Intelligence (ABI) concludes that "despite getting off to a slow start later this year, U.S. satellite-based digital audio radio services will be driven primarily by the automotive OEMs, similar to the telematics model with GM and OnStar," said ABI senior analyst, Frank Viquez, the author of the report.

The motivation on the part of the OEMs will come from the large investment stakes they have in XM Satellite Radio and Sirius Satellite Radio, the two competing companies in the fledgling industry, as well as the effort to drive new revenue streams from e-commerce and other value-added services when SDARS are coupled with telematics systems in the future, the report said.

Evolving telematics platforms such as Java will enable the seamless integration of additional services and system upgrades. The study examines SDARS and other future telematics applications such as remote vehicle diagnostics, real-time traffic information and server-based navigation. The world telematics market for personal vehicles will rise from $3 billion in 2000 to almost $13 billion by 2006, while recurring annual revenues for services alone will account for more than $4 billion of that 2006 total, according to the study's findings.

The level of electronics in a vehicle has been steadily growing through the years, and today, encompasses everything from the audio system to braking and powertrain controls. As more computing power is added to the vehicle, the auto industry has realized that the automotive design cycle cannot keep up with the electronic design cycle, so the need for a common, high-speed in-vehicle data bus has become abundantly clear.

The study outlines industry efforts to define a common set of data bus standards along with its progress and comparisons of emerging solutions, such as IEEE 1394b, Media-Oriented Systems Transport (MOST), IDB-C, FlexRay and Bluetooth.