Satellite Radio Playground

By Amy Gilroy

Just how popular are car radios that can control Pandora (NYSE:P) or Internet Radio?

It’s a bit early to draw conclusions, but some indicators are filtering in.

Our quick poll of retailers says few consumers are coming into stores asking for the feature, BUT some retailers say that the number of interested consumers is slowly starting to rise.

Pandora or Internet Radio is offered as a feature on new car radios that can control, say Pandora, from the radio’s buttons so you don’t have to fumble with the phone while driving.

The Consumer Electronics Association (CEA) predicts that approximately 6 percent of aftermarket car radios sold to retailers this year will include a form of Internet Radio and that figure will increase to about 14 percent by 2015, said the CEA.

A leading car stereo chain, Freeman’s Stereo Video said 1 in 5 people  or 1 in 10 (depending on the storefront) will come in asking for Internet Radio control.  “More and more people are coming in asking for it… It hasn’t hit mass demand yet. [It] may be an awareness issue,” said general manager J.R. Stocks

Jeff Pitts of the Mickey Shorr chain said, “We’re advertising Pandora quite a bit on one of our pieces , but we’re not seeing much. It’s not a huge category yet.”

Two car stereo specialist retailers–Westminster Speed & Sound and The Specialists–said people want the feature when its demonstrated, “Up till now I am not having many people coming up specifically looking for it but we have found that when people are told that it is an option, many people like it,” said Mark Miller, owner of Westminster Speed & Sound.

A  second recent study was announced concluding that in the new car market, Internet Radio may be a slow starter. ABI Research said drivers in the  US, UK, France, Germany, Japan and China prefer navigation over Internet Radio.

Of the 1,500 people studied, if someone had never used an infotainment service, then between 59% and 72% said they would choose navigation over Internet Radio in all countries except China, where the greatest interest was in concierge services.

“Internet Radio only showed average levels of interest among non-users, even in the US… Surprisingly email, social media, and networking integration scored very low,” said ABI’s Dominique Bonte. He notes that people may prefer navigation because they are familiar with it.

Another notable finding in the study  is that those who did use Internet Radio, tended to use it frequently.

“…the high frequency of use of Internet radio among users suggests that car owners embrace new services once they have become familiar.”

Consumers in the study believed a “connected radio” with navigation or Internet Radio would cost under $700 plus $10/month service fees.

Strategy Analytics found similar results on the OEM side, but said Internet Radio may prove more successful in the aftermarket where you have more tech savvy consumers that seek out new technology.

Source: CEoutlook, ABI Research

Amy Gilroy is the Editor of CEoutlook and a Contributing Author to Market Playground and Satellite Radio Playground.