Like PE says: Don't believe the hype!
I guess Ford announcing stronger support for HD and the new iTunes tagging features count for something. But where the rubber meets the road is whether car buyers are willing to pony up the extra cash for the higher-end stereos. While Ford is doing better than Chrysler and GM, the last time I checked, the auto industry isn’t exactly thriving. And let’s not forget that just few years ago the big hype was how the auto manufacturers were embracing satellite, yet that seems to have mostly resulted in lots of XM Sirius-equipped rental cars.
I keep searching for information about all these new non-automotive HD receivers and I keep coming up with the same iBiquity press release regurgitated all over the place. The release lists off a pile of model numbers, but no other info that might help me evaluate how great these new receivers might be.
According to iBiquity there is no CES 2010 news!
Only This Week in Consumer Electronics has any useful information, including the most valuable data of all: price. Amongst the models listed by TWICE, at $69 the lowest cost receiver is Radio Shack’s FM-only Gigaware-branded add-on for the iPhone and iPod Touch. The price isn’t outrageous, and marks only a $10 – $20 premium over a typical FM-only radio for the iPhone. Past that, all of the new HD receivers come in over a hundred bucks. That includes even the entry from discount electronics brand Coby, whose HDR700 has a street price of around $99.
I really believe that price is the key here. With the collapse in the quality of commercial radio programming, HD Radio really has not been able to sell itself on programming, despite the largest broadcasters like CBS Radio blanketing their stations with ads touting HD’s virtues. The quality issue is also debatable. So, at best, I think HD Radio is still a curiosity for most people who might be attracted by having a few more channels at their disposal, or having AM news, traffic and weather on the FM HD channels. But what are people willing to pay for this curiosity?
Putting aside geeks, radio-heads and gadget freaks, my bet is that the average shopper is willing to pay a $10 to $20 price premium to get HD Radio. That’s why I think the pricing on the Radio Shack iPhone add-on is about right. But that one device isn’t going to greatly expand HD radio listenership. First, because it’s limited to iPhone and iPod Touch owners, and second because I’m doubtful that too many people want to hang an extra little device off their player. I sure don’t.
Once you move into the world of what we might call “premium” or higher-fidelity radios–a market pioneered by the Tivoli Model One–or A/V receivers, then it looks like that $10-20 price premium is starting to become a reality. But again, I’m really not sure how big the market for these items are. I’ll agree that A/V receivers are popular, but how many people really listen to radio on them?
The way HD Radio is going to make it into more households is when there’s an HD-capable $50 radio on the shelf of every local store that sells electronics. That radio doesn’t need to be fancy, but it’s got to have a speaker and a handle, run on batteries or AC, and look like a radio. It shouldn’t be a headphone-only radio, but it should have a headphone jack. It has to be the kind of radio you can take into the garage or the backyard, keep in the kitchen or on the bedside table.
Simply, for HD Radio to take off, the average person walking into the store looking for a new radio (not looking for an HD Radio) has to see an HD-capable radio and decide that the extra $10 or $20 is worth it. As long as HD Radio is depending on folks to go out of their way to seek out and buy HD Radios it will always be a niche market, struggling on the sidelines.
Beyond that, once HD Radio is a $10 – $20 premium on boomboxes, iPod docks and compact stereos then it has a shot at real popularity and use. In the car make it part of every stereo, including the base-model. These are the devices most people use to listen to radio, and right now the HD Radio options for them are skimpy, to say the least.
If the public were dying for HD Radio it would be a hit already. Give them the option to hear it without spending a lot of dough, and HD Radio has a fighting chance. But 24 new models, with only one under $100? Forget about it for 2010.
