Despite slow start, satellite digital radio industry will flourish

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15 August 2001 News

Although 2001 will mark a disappointing launch for the US satellite-based digital audio radio services (SDARS) broadcasters, XM Satellite Radio and Sirius Satellite radio, they will ultimately benefit from increased consumer uptake and large recurring service revenues. According to findings in a new study from Allied Business Intelligence (ABI), by 2006, recurring annual service revenues for SDARS can be expected to reach $350m.

"Despite getting off to a slow start later this year, US satellite-based digital audio radio services will be driven primarily by the automotive OEMs, similar to the telematics model with GM and OnStar," said ABI Senior Analyst, Frank Viquez, the author of the study. "The motivation on the part of the OEMs will come from the large investment stakes they have in XM and in Sirius, as well as the effort to drive new revenue streams from m-commerce and other value-added services when SDARS are coupled with telematics systems in the future."

According to the analyst group, evolving telematics platforms, such as Java, will enable the seamless integration of additional services and system upgrades. The study examines SDARS and other future telematics applications such as remote vehicle diagnostics, realtime traffic information and server-based navigation. ABI forecasts that the world telematics market for personal vehicles will rise from $3 bn in 2001 to almost $13 bn by 2006, while recurring annual revenues for services alone will account for over $4 bn of that 2006 total.

The level of electronics in a vehicle has been steadily growing through the years, and today, encompasses everything from the audio system to braking and powertrain controls. As more computing power is added to the vehicle, the auto industry has realised that the automotive design cycle cannot keep up with the electronic design cycle. As a result, the need for a common, high-speed in-vehicle data bus has become abundantly clear, says ABI. The study, The Digital Car, outlines industry efforts to define a common set of data bus standards along with its progress and comparisons of emerging solutions, such as IEEE-1394b, Media-Oriented Systems Transport (MOST), IDB-C, FlexRay and Bluetooth.

www.alliedworld.com

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Despite slow start, satellite digital radio industry will flourish

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