
Late last week
Apple announced that they've partnered up with GM, Ford and Mazda (which is... uhm... Ford) to allow for "seamless integration" of the iPod into their vehicles. In fact, the number was thrown out that more than 70 percent of new 2007 model vehicles sold in the United States will have iPod compatability.
What sort of impact will this have on Satellite Radio? If you read into this ominous article - it spells certain death - but I'm not so sure about that.
Let's backtrack for a bit. None of this should come as a surprise for anyone. With millions upon millions of iPods sold, and 75 percent marketshare, there's no doubt in anyone's mind that this was bound to happen. Honestly, if this was a surprise, then you need a new crystal ball. iPods have become ubiquitous with digital music, and digital music is the evolution from CDs. The fact that some cars still offered cassette players simply became an easy solution to integrate the iPod with the vehicle for many people.
And actually comparing this "iPod integration" is with the cassette adapter isn't too far off. Ford's plans are to add a standard 3.5mm audio-input jacks into nearly half of its lineup starting this fall - as standard equipement. It's the
optional equipment, like Ford's "TripTunes Advanced" (at a whopping $200, plus installation) and GM's "Personal Audio Link" (which runs $160, plus installation) that allow for the "seamless integration" of the iPod.
Spin spin spin.
In all probability, this could be a benefit for the satellite radio industry. Now your plug-and-play receivers don't even NEED to have any FM-transmitters setup, because there's a crystal-clear audio-input jack at your disposal (NAB take notice). With satellite radio receivers built from the ground-up for vehicle integration - what with easy-to-read displays, and driver-friendly controls (areas that the iPod is NOT strong in) - this could work out to HELP the industry instead of hurt it.
Now, it's not all roses of course. iPods are everywhere, and soon all the content stored on your iPod will be easier to hear in your car. This does provide a few roadblocks for satellite radio in terms of
public perception. One - it's harder to justify the additional expense of satellite when a customer has already invested in their iPod (both with hardware and in content). So when they're in the showroom and thinking about what options they want, *perception* comes into play very quickly. Second - even if they do have the satellite radio option in their new vehicle, this creates an additional distraction to usurp listening time.
These two issues are *very important* to both XM and SIRIUS, because they depend very heavily on users experiencing satellite radio. Most people look at satellite radio as a luxury, not a necessity. So when it's offered to them for free for 3-months or a year, they'll take it. And only once they experience it, they love it and "can't imagine living without it." It's getting people to
experience satellite radio that is the number one objective. Once they do, the service sells itself.
One solution is to get away from being standard-equipment in vehicles, and get into being standard-equipment. Once you eliminate the hardware/installation costs, no one will turn down a free no-contract trial subscription. No one. Another solution is to bump up the satellite radio services offering. XM NavTraffic and SIRIUS Traffic are key services that give users more than just "radio" - especially as GPS navigation systems become more of a necessity for drivers (again, another piece of hardware that people "can't live without"). XM ParkingLink again is on the right path. All eventually evolving into satellite "radio" estabilishing "The Connected Car."
A 3.5mm audio-jack which is the equivalent to a cassette player is not a threat. But have no doubt that the iPod is.