Faster Mobile Video Growth Driving the U.S. Car Multimedia/Communications Market

4/23/2003 - A recent study by VDC has found that U.S. consumption of 12 volt mobile video has more than quadrupled since 1999, in an otherwise sluggish market. "The OEM and Aftermarket for 12 Volt Electronics, Volume 2: The U.S. Car Multimedia and Communications Market, 2nd Edition" found that the mobile video market, which was more than $624 million in 2002, will continue its rapid growth, reaching more than $1.25 billion by 2006. A number of factors are expected to drive growth of this rapidly ascending technology.

A mobile video system is somewhat unique in that it appeals to a broader range of customers than the traditional car audio enthusiast. Families with young children are finding that a mobile video system is a perfect way to entertain young children on long car trips. This gives mobile video more of a mass-market appeal, in spite of the relatively high cost of such systems. Families perceive a benefit to purchasing a video system that they do not necessarily see in an expensive car audio upgrade.

Lower prices have and will continue to broaden the market appeal of car video systems. Average factory selling prices of packaged systems, for example, have fallen by approximately 30% since 1999, and VDC expects that prices will continue to fall by over 5% per year through 2006.

Although most mobile video systems are and will continue to be installed in SUVs and other larger vehicles, new configurations, in particular headrest monitors and other rear seat entertainment options, combined with screen technology improvements, make it easier for video systems to be installed in passenger cars.

VDC expects that separate multimedia components (video sources, monitors, surround sound processors, etc.) will continue to lose market share to packaged systems over the next five years. Packaged systems offer more of a mass-market approach than component systems, which are typically sold through audio/video dealers that custom build systems for their customers. At this time, packaged systems are primarily factory or dealer installed, a trend that VDC believes will continue over the next five years.

A number of vendors have entered the mobile video market since 1999, and new and old players alike have benefited from the rapid popularization of this technology. As the market matures over the next few years, growth rates will slow, even as overall revenues continue to increase.

The report, "The U.S. OEM and Aftermarket for 12-Volt Electronics, Volume 2, Second Edition," is a multiclient study designed to provide subscribers with relevant and up-to-date market intelligence to support strategic marketing and product planning decisions. Volume one of this report, "The U.S. OEM and Aftermarket for 12-Volt Electronics, Ninth Edition," covers the U.S. market for car audio products, including head units, speakers and electronics.

About VDC
Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets.

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