The single most interesting part of my experience at CES 2005 was attending a panel discussion entitled, "Plug In and Drive: Automotive Electronics." The day-long event, designed to foster collaboration between consumer electronics manufacturers and the auto industry, was sponsored by the Consumer Electronics Association, the Transportation Convergence Electronics Association, and the Society of Automotive Engineers. Executives from aftermarket car electronics manufacturers and Detroit auto makers participated in the two-part discussion.

Imagine: a room full of the people who have traditionally made replacing the stereo in your new car as difficult as possible (the "OEM," or Original Equipment Manufacturers, in industry jargon), meeting with the people whose business is to sell "aftermarket" car stereo systems that are better than what comes with your new car. There was definitely the potential for some sparks to fly.

Instead, the auto industry reached out to the CE industry at the conference in an attempt to bridge the aftermarket-OEM divide and to forge stronger bonds between the two sides. This was dramatic proof of the growing importance of consumer electronics in both automotive design and consumer purchasing decisions. Gary Shapiro, CEO of the Consumer Electronics Association, noted in his keynote address that "car electronics now represent 30% of the value of each car sold." Clearly, consumers want (and expect) to have the latest, greatest electronics gear in their new cars. Good news, folks — Detroit is finally listening!

In the chaos of CES, I was only able to attend the first half of the conference, which focused on consumer electronics; the afternoon session was devoted to the auto makers and factory electronics. I arrived at the 9 AM panel pretty much exhausted from the first three days of the show, and not very excited about sitting through a three-hour discussion. But within the first five minutes of the session, I found myself totally energized. This was not going to be a "how to sell more car stereos" seminar; instead, this was a unique opportunity to listen to industry leaders discuss where they saw the mobile electronics industry heading, with an emphasis on how to increase business for both aftermarket electronics manufacturers and auto makers.

In fact, the session proved to be so interesting and provocative that it colored my overall impression of CES 2005, as you can see in my CES 2005 Mobile A/V Overview. This, then, is my attempt to give you some insight into how mobile A/V systems might look in the coming years.

To give you some idea of where I'm going to take you, check out the image below. This is a vision of a future mobile A/V sytem as presented by panelist Steve Witt, V.P. of Brand Marketing at Alpine. (Steve was generous enough to let me review his PowerPoint presentation in preparation for writing this article — thanks Steve!).

Image courtesy of Steve Witt and Alpine Electronics.

You'll notice right away that there is no car stereo, per se, shown in this next-generation vehicle system. Instead, you see a digital server that manages all the content you'll be taking with you on the road. Music, video, e-mail are downloaded wirelessly from your home computer (or local wireless hotspot) to your car. Video screens are located in the headrest and on passengers' laps. A windshield display gives the driver real time directions, traffic, weather information, and such safety features as intelligent cruise control and lane departure alerts.

Cool stuff, huh? Obviously, this is just one example of how mobile A/V may look in a couple of years. The members of the panel put forth a variety of perspectives on the future of mobile A/V, some of which conflicted. Despite their varying perspectives, the members of the panel kept returning to a new vision of future automotive electronics in which the automobile is no longer treated as an isolated, specialized A/V environment. Instead, the car is an extension of the digital home, the digital office, and the new digital infrastructure of the country. Steve Witt summed it up best: "We [the automotive electronics industry] are on the threshold of a paradigm shift."

The "Consumer Technologies" panel was opened and moderated by John McElroy, host of the television program "Autoline Detroit" and a noted journalist, broadcaster, analyst, and lecturer on automotive topics. McElroy opened the session by noting the significance of Detroit approaching aftermarket CE manufacturers: "The auto industry is very keen on tapping into [the consumer electronics] market, because it knows there is so much consumer interest in it. And yet, there's no easy interface to get these products into cars. There are interfaces, but they're not always the most elegant solutions. So ... let's get the two industries [CE and auto makers] talking to one another."

The panel consisted of the following:

• Bob Borchers — Senior Director iPod Auto Integration, Apple Computer
• Dr. Ken Liao — Chief Technology Officer, Panasonic
• Bob Struble — President and CEO, iBiquity Digital Corp.
• Stephen Witt — Vice President Brand Marketing, Alpine Electronics

Each panelist was asked to give a brief, 10-minute presentation on their company's vision of where mobile electronics is heading, detailing the major challenges facing consumer electronics manufacturers and auto makers. McElroy set the stage by noting that while it typically takes around three years for a single new automobile to be designed, approved, and produced, consumer electronics move on a much faster cycle — anywhere between 6 to 12 months.

Pioneer's new CD-IB100 iPod adapter.

Apple's take on automotive
Apple's Bob Borchers began his presentation by proposing that the iPod is the best current example of the marked contrast between OEM and aftermarket product development cycles. The iPod has been on the market for just over 3 years (39 months to be exact), which is roughly equivalent to the product development time for a new vehicle. In that time, Apple has released 20 major iPod software updates (primarily relating to Digital Rights Management issues brought forth by the recording industry), introduced 4 major hardware platforms (including the original iPod, the Mini, the iPod Photo, and the iPod Shuffle), and increased storage capacity from 5 to 60 gigs. In addition, Apple has made the iPod compatible with Mac OS 9 and 10, and with Windows 95 and Windows XP. Over 10 million iPods have been sold over the course of these product developments, Borchers said.

As a newcomer to the automotive electronics market, Borchers listed four reasons why Apple cares about mobile A/V:

1. Apple created the iPod to be the best digital music player in the world, and part of that goal is creating the best possible digital music experiences wherever you are, including in your car.
2. Apple's own research has shown that a majority of iPod customers use (or want to use) their iPods in the car.
3. Apple believes that customers will to want to bring more and varied types of media wherever they go, including into the vehicle. Obviously, Apple wants the iPod to be the primary portable digital device.
4. Finally, Apple does not want be a supplier to the auto industry, but a partner with companies such as Panasonic and Alpine.

Borchers ended his opening presentation by asking, "Why do you need to recreate the digital music ... user experience [in the car]?" He noted that there is a lot of talk about hard drives in the car, about ripping CDs in the car, and about downloading music files in the car.

Alpine's KCA-420i iPod adapter gives you control of your iPod from an Alpine head unit.

"We believe very strongly, and I think have good evidence that suggests that customers just want to do things once," Borchers said. "They want to find the most convenient platform to rip their music, buy their music, and take it with them and then have the best listening experience wherever they go. And we believe that's uniquely what Apple and the iPod/iTunes platforms can offer."

What it means to you
Borchers' presentation was emblematic of the general message articulated by the rest of the panel during the course of the session: The aftermarket recognizes that customers want a seamless digital experience in which they can easily access their digital media wherever they are. The challenge, then, to the aftermarket (including Apple) is to make this digital portability a reality within the vehicle.

Of course, Apple sees the iPod as the best single device to accomplish the shift to digital portability — and based on the current iPod mania, they have good reason to think so. But where does that leave the rest of the aftermarket manufacturers? Are they supposed to get by on iPod integration devices? Perhaps in Apple's vision of future mobile A/V. But as Dr. Paul Liao from Panasonic noted, the CE world is much larger than any one single device.

Panasonic weighs in
Dr. Liao, Panasonic's Chief Technology Officer, offered a broader view of the consumer electronics industry, in which the automotive environment is just one of multiple enivironments in which consumers expect to be able to enjoy digital media.

Liao began by highlighting five primary principles that Panasonic as a company has identified as crucial to the future of CE:

Ken Liao cited Panasonic's participation in the Digital Living Network Alliance as an example of advancement in interoperability.

1. Digital: Looking at digital, Liao noted the dramatic growth of digital television sales. Flat-panel TV sales were up 30% in 2004, Liao said, and he estimated that plasma televisions (in which Panasonic happens to have a market-leading share) will account for 40% of all flat-panel TV sales for screens 30" and larger in 2005.
   
   
2. Easy: Liao again used televisions as an example, focusing on the often mystifying array of connections you have to make to hook your television to your home theater system. In this case, Liao said, the development of the HDMI digital connector has gone a long way towards simplifying the process. An HDMI cable carries uncompressed, high-definition video and uncompressed, digital 5.1 audio signals on a single cable, eliminating the need to connect multiple cables.
   
   Still, Liao admitted that easy is "something that's not quite done," and he called out user interfaces — like trying to navigate your TVs multiple menu screens — as an area where there is a lot more to be done.
   
   
3. Anywhere: This is best symbolized by the growth of digital camera sales, Liao said. The CEA estimates that 33% of U.S. households own a digital camera. The development of advanced features like optical image stabilization, 12X zoom, ultra-fast shutter speed, and incredibly compact camera bodies have made digital cameras a success story in terms of creating a digital product that truly works well anywhere.
   
   "Now, when we talk about anywhere, we're talking about the car too," Liao said. "Really, we want to bring home theater to the car." He went on to discuss the evolution of rear-seat video entertainment and advanced digital audio codecs, like DVD-Audio, as areas of future advancement. Liao specifically highlighted the 2005 Acura TL, which comes standard with a 6.1-channel DVD-Audio system designed by famed audio engineer, Elliot Scheiner. Liao likened the sound quality of DVD-Audio to "digital analog" — it combines the audiophile sound quality of analog recordings with the superior consistency and flexibility of digital signal transfer.
   
   
4. Interoperability: "Interoperability is a big problem, especially when you're talking about networking," Liao said. He cited Panasonic's membership in the Digital Living Network Alliance (DLNA), a consortium of CE and computer companies that has created standards for allowing different products to work together. Products with a DLNA stamp on it will work with products from other manufacturers, other platforms, and other types of media, Liao said, which is a great step towards achieving true interoperability in consumer electronics.
   
   
5. Liao cited Apple's iTunes/iPod package as a brilliant solution to the problem of security in the digital age, specifically as it relates to the increasingly contentious issue of Digital Rights Management (DRM). DRM refers to ensuring the copyright protection of digital forms of music, text, video, etc. You'll be hearing a lot more about DRM this year — though with the best products, like the iPod, the end user rarely struggles with built-in DRM security features.
   
   What it means to you
   Liao echoed Bob Borchers' theme of the need for seamless integration of the many different digital products we use today and will use tomorrow. Yet Liao took a much broader view of the challenges to perfecting digital integration, and really emphasized the need for CE manufacturers to improve the ease-of-use and interoperability of digital devices in the coming years.
   
   In terms of mobile A/V, Liao cited DVD-Audio, surround sound, and mobile video as areas of future emphasis for Panasonic.
   
   

iBiquity and the future of radio
Bob Struble, President and CEO of iBiquity Digital Corporation, was the next speaker. iBiquity Digital has developed HD Radio technology, which is revolutionizing traditional AM/FM radio. If you haven't heard about HD Radio technology yet, you will soon.

Struble began by joking that the discussing the idea of turning analog radio into digital seemed a bit silly in 2005, especially in the presence of digital pioneers like Apple, Panasonic, and Alpine. Struble focused his remarks on the development of HD Radio technology and iBiquity's plan for rolling out HD Radio technology to broadcasters and consumers in 2005. In addition to the vastly improved digital audio quality of the signal, Struble highlighted several key features of HD Radio technology that will impact future mobile A/V experiences.

Struble suggested that the improved audio quality of the AM HD Radio signal — which will sound as good as FM does now (FM will have near-CD quality sound) — will revitalize AM stations and bring back niche music formats to the AM dial. Scrolling text and information, including traffic and weather reports and supplemental music data, will also be a major benefit to HD Radio users.

Not only will you have access to supplemental text information on an HD Radio tuner, but stations will be able to broadcast multiple channels on a single FM frequency. NPR's Tomorrow Radio Project is on the cutting edge of HD Radio "multicasting." This year alone, NPR expects to have 312 public radio stations broadcasting in HD Radio, many of which will offer multiple programs on a single frequency. Listeners of 88.5 FM in my hometown of Charlottesville, VA, for example, may be able to choose between an all-news feed, an NPR talkshow format, and a classical music stream without changing the frequency.

Struble cited research that shows a majority of consumers want HD Radio in their car.

Struble said that by 2007, he expects all OEM car radios will be HD Radio-ready. This year, there will be between 15 and 20 aftermarket HD Radio tuners available, he noted, including models from Kenwood, JVC, Alpine, Panasonic, and Sony. And Struble estimated that more than 2,500 stations across the U.S. will be equipped with HD Radio technology by year's end.

What it means to you
Clearly, HD Radio technology is coming soon to a car stereo near you, potentially a major trend in mobile A/V over the next several years and a nice upgrade to the in-car experience. I know I'm looking forward to losing the static and interference I fight through every morning while trying to tune in Morning Edition.

HD Radio is a very good example of how the digital revolution is transforming mobile electronics — now. Along with superior sound quality, digital technologies will allow us to access whole worlds of information, in real time, that we cannot currently bring with us into our cars. Scrolling text and traffic reports on an HD Radio are just the tip of the iceberg.

Alpine gives us the "20,000-foot" view"
Bob Borchers and Bob Struble's presentations focused in narrowly on a specific product (iPod) and a specific technology (HD Radio), each of which play major roles in the future of mobile electronics. Ken Liao from Panasonic provided a balanced overview of the CE industry and outlined five significant concepts that help define consumer expectations and how the industry can react to them. It was appropriate, then, that Steve Witt picked up on how the iPod and HD Radio are changing mobile electronics now, and then went on to present a long-term view of where the mobile A/V industry is heading.

"Plug In and Drive: Structural Change in Automotive Electronics," provided a "20,000 foot view" of mobile electronics, Witt said. Throughout his talk, though, he grounded his argument in specific technologies and products that are driving the change.

Witt began his presentation with a series of sequential statements:

• Mobile electronics has changed.
• Consumers have changed.
• Vehicles have changed.
• Technology = change.

Witt challenged both CE manufacturers and auto makers to envision how they can bring value to the mobile consumer in the new, digital "connected environment."

"We are all on the same page here," Witt observed. "Today is all about, 'Where do we go tomorrow?'"

Digital technology and products have changed the average consumer's lifestyle, and consequently, consumer expectations of how electronics devices should function. In the car, therefore, the traditional business model that focuses on replacing the factory stereo and speakers with superior electronics will not be productive in the new digital economy. Instead, auto makers and consumer electronics companies must recognize that the "wireless generation" increasingly relies on portable devices to provide the functionality that permanent components used to provide. The CE's and auto industry's solution is something Witt and Alpine have termed the "Connected Driving Experience."

The current "isolated experience" will become a "connected driving experience," Witt said. Image courtesy of Steve Witt and Alpine Electronics.

There are four primary aspects of this connected driving experience:

1. Car and home electronics are (finally!) converging. As Borchers and Liao both noted, people don't want to use one device at home, a different one in their car, and a third at the gym or at work, in order to listen to their music collection. We have come to think of the portable device as the only one we need. After all, do you really want to worry about updating your music collection on your home computer, your car stereo (or hard drive), and your iPod whenever you get new music?
2. Digital technology will be used to enhance safety and convenience within the automobile. Real-time traffic and weather, navigation, lane departure warning systems, intelligent cruise control, OnStar — these are early examples of the kinds of technologies and information we'll soon use in our cars.
3. Products and software must be simple and easy to use. Products that currently allow you to wirelessly download music from your computer to your car, for example, are not yet easy enough to use to gain widespread acceptance.
4. Content is going to be the driving force behind the development of new mobile products. People will want access to their email, the internet, traffic reports, their music library, videos, and a whole host of other services we haven't even thought of yet — and they'll expect it instantaneoulsy. The vehicle will be a node in the "personal digital network" that each user creates based on their "digital lifestyle."

"Whoever can facilitate system integration and simple and easy to use content management in the vehicle — recognizing that people are gonna move this content — will win," Witt said.

Wireless networks, WiFi hotspots, and the like will come to be a major factor in mobile electronics. The ability to customize your content continues to be crucial to consumers, Witt noted, and Apple's iTunes/iPod system has capitalized on this. The iPod is akin to the cassette deck in the 1970's, Witt asserted. Both allow you to create personalized playlists and then to enjoy them in multiple places and even to share them. The ability to integrate portable devices easily into your car system is the future of mobile A/V. The new business model is "add-in and add-on," Witt concluded.

What it means to you
Alpine is already moving quickly in the direction that Witt's analysis points. Alpine was the first aftermarket manufacturer to allow you to control your iPod from your car stereo, and at CES 2005 Alpine showed off the second generation of iPod-ready head units. Navigation, a big deal in everybody's new product lines, was a highlight of Alpine's 2005 lineup — the NVE-N872A navigation system features voice control operation and real-time traffic updates. Perhaps most surprising of all, Alpine showcased a number of OEM-integration products at CES, including a mobile video package that integrates easily into overhead consoles found in a large number of new cars.

The CEA's vision of "The New Rules for the Digital Road."

This year at CES we saw the debuts of an exciting array of products, including: a slew of iPod integration devices from manufacturers like Alpine, Pioneer, Monster, Kenwood, and Sony; the Delphi MyFi portable XM satellite radio tuner; navigation systems (like Alpine's NVE-N872A and Pioneer's AVIC-N2) equipped with NAVTEQ real-time traffic information; portable DVD players with built-in TFT screens from Sony and Audiovox that snap into overhead modules in your car and then pop out for use on your lap or inside the house; a WiFi-enabled in-dash DVD player from Sony that wirelessly sends the audio and video signals to a monitor in the backseat; multiple in-dash receivers with built-in Dolby, DTS, and DVD-Audio decoding (including the Panasonic CQ-VD7700U); and new receivers with built-in HD Radio tuners from JVC, Panasonic, Alpine, Sony, and Kenwood.

But as impressive as this year's mobile A/V products are, after listening to the "Consumer Technologies" panel discussion about mobile A/V in the future, I have to say, I can't wait for CES 2006!



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"The products that have the greatest impact are often the less heralded devices that require a leap in understanding. And they often blur the lines in between categories. That's the biggest thrill of CES — watching the product landscape shift before your eyes in real time."
- David English, Attache, January 2005