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Old 10-25-2002, 09:07   #1 (permalink)
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Ford, suppliers search the dial for better sound with digital radio

By LINDSAY CHAPPELL
Automotive News

Ever since the electronics and auto industries hit on the idea of bringing the Internet into vehicles, the possibilities have run wild -- backseat movies, stock market reports, e-mail, news.

If any technology appeared destined for dinosaur status, it was the scratchy old analog concept known as local radio. Why would drivers want to continue listening to static-laced commercials and 1970s hits when the Web beckoned?

But rumors of the demise of the old-fashioned car radio may have been exaggerated. A small technological flanking maneuver is occurring in automotive circles. Some of the country's largest radio broadcasting companies have teamed up with transmitter manufacturers, auto component suppliers and audio system makers to ensure that in an era of space-age diversions, plain old radio doesn't disappear from the instrument panel.

The concept is digital radio. According to its proponents, digital radio, also called HD radio, promises the same quality leap over existing AM and FM radio broadcasting that compact disks made over vinyl records. The promised results include an enhanced radio signal, better location of weak signals and the ability to hang on to a local station longer as the vehicle travels through a region.

The implications for the burgeoning telematics segment of the industry could be serious: If consumers are given a medium they historically have wanted, but with highly improved quality and at no cost, how many will opt to pay a premium for an alternative medium?

Cost is always an issue. And radio is virtually free -- or at least freer than it ever was. Radios have been a ubiquitous piece of standard equipment since the 1980s. And as they have morphed into more advanced components in the past two decades, their price has remained relatively flat, with radio service itself free to all.

The concept has powerful backers. Ford Motor Co. has invested in the multi-industry partnership that hopes to roll out the new radio technology in the next 12 months. So has Ford's affiliated component supplier Visteon Corp. and Visteon's General Motors-affiliated competitor Delphi Corp. The three giants are behind iBiquity Digital Corp., a Columbia, Md., digital technology licensing company that is pushing digital radio.

iBiquity CEO Robert Struble declines to say how much the automotive companies have in-vested, but they are joined by the 12 largest radio broadcasters in the United States and 15 of the top 25, Struble says.

Others on board the technology conversion include consumer-brand manufacturers such as Clarion, Alpine and Fujitsu.

As many as 10 automotive suppliers are expected to showcase digital radios in January at the consumer electronics show in Las Vegas.

"The great thing about radio is everyone's got one in the middle of the dash," Struble says. "Radio is one of the broadest and most deeply entrenched consumer electronics products in the world."

There are an estimated 800 million radios in service in the United States, or an average of six per household, according to a study by the Yankee Group con******ts in Boston. Another 70 million new radios are sold each year - not counting the 15 million or so that come embedded in the front cockpit of new cars and trucks.

So how can radio be threatened?

The biggest challenger is satellite radio. Two companies, XM Satellite Radio and Sirius Satellite Radio, have introduced networks in the past 12 months that give consumers 100 channels of mostly commercial-free broadcasting.

The service is formidable, giving drivers a panorama of listening options that is wider than the choices that most cable TV services offer viewers. Channels range from trip-hop dance music to 1950s-style country swing to BBC news broadcasts to urban gangster rap.

Launched in partnership with GM, which invested $120 million in the concept, XM is offered on 25 new GM models, although the automaker will install XM equipment into about any vehicle it makes. The network should reach 300,000 to 400,000 subscribers in 2003, according to Michael Merrick, an XM service spokesman for GM.

American Honda Motor Co. also invested about $50 million in XM and will offer the technology in its vehicles.

One outside estimate projects as many as 21 million satellite subscribers by 2006.

But there is a cost for XM - $9.99 a month, a one-time $14 activation fee and another $325 for the necessary receiver system.

Merrick says GM is waiving the hardware costs for many of its models in an effort to fan the flame under the technology. "We love the satellite guys," Struble says of the competition. "Those guys are also customers of ours - we sell them our technology. So we want to see them succeed.

"But we believe they're in a different market. For the mass market, we believe that plain old, everyday AM and FM radio, with its local content and local interest, is still going to be the dominant medium. People still want their local radio stations with their local news, local weather and local traffic."

Satellite radio is only one part of the threat to radio broadcasting, he says. The full threat could be described as every other digital medium. Any digital medium is a potential pull away from radio listening, and that includes mobile information and entertainment, wireless palms, Web-enabled phones or even pagers that can be used to get mobile entertainment.

"The radio broadcasters are happy to engage in all those new battles," Struble says. "They just don't want to do it with inferior technology. Radio is not going to be able to compete effectively unless they get into this digital battle. They can't remain the only analog medium in a world that's full digital."

Fighting for turf requires a quality upgrade. To get there, radio stations throughout the United States will have to install digital transmission equipment. That equipment will convert normal broadcasts into digital signals, which then are transmitted over the air to digital receivers. They will use their existing broadcast towers and frequencies. The required investment in new-generation technology could come in at under $100,000 per station.

The hardware must change on the receiving end, too. The first factory-installed digital receivers in autos should hit the market in about 18 months, according to Struble, although consumer models probably will arrive on retail shelves as early as spring.

Digital systems are expected to cost about $100 more than comparable radios because of their need for chips. As the concept rolls out, differing radio technologies will have to co-exist in vehicles for several years.

That might present auto service technicians with a challenge in the years to come, but not broadcasters - or vehicle owners.

The best comparison is the transition from black and white TV to color TV in the 1960s. Millions of Americans continued to watch black and white models, even though TV networks were transmitting color programming. The old TVs still worked, and consumers got around to converting to the superior technology as they saw fit.

But iBiquity and the radio broadcasters it represents recognize that technology is advancing. Eventually, digital radio will widen its service offerings. Ultimately, Struble says, it could provide subscription-based products in the same way satellite providers are proposing.

Because digital transmission will take up less of the available bandwidth than the current analog radio transmissions, there will be room in the signal for additional data, such as song titles and artist information that would appear on the cockpit information screen. Chances are, that data flow would be free.

What comes next is more ambitious. Drivers might subscribe for customized traffic information, tailored to a specific commute. Digitally broadcast data would flow over the existing vehicle display screen. There would be customized weather reports and a means for requesting specific data.

The industry is prepared to combine digital local broadcasting with satellite technology. Radios already have analog radio bands and satellite radio bands sharing the same audio systems.

"That would be quite easy to do," Struble says. "If satellite radio grabs hold, and HD radio also grabs hold, you very quickly will see a desire among customers, automakers and receiver manufacturers to have them both in integrated radios. We're already thinking about how we would do it."
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