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Are CD Players Headed for Mass Extinction?

Siemens VDO executive Frank Homann predicts the CD player will be extinct by 2015, but skeptics say stubborn consumers will keep it alive far longer.

Frank Homann recently sparked a lively debate in the automotive infotainment community without even trying.

Last April at the SAE International World Congress, the Siemens VDO vice president-cockpit modules, brazenly declared the in-vehicle CD player a dead man walking, doomed by a rising tide of portable digital music players, high-tech cell phones and packaging issues.

“We’re developing systems right now for 2012 and (CD players are) still in,” he said. “I believe that probably by 2015 you won’t see them. If a company takes a very drastic approach, they could actually take (them) out sooner.”

The CD player’s demise will be driven by the popularity of breakthrough technologies such as the iPhone, Apple’s new $500 phone/PDA/MP3/video player unveiled in January. “iPod was huge,” Homann says, referring to Apple’s blockbuster MP3 player.

“It wasn’t just the functionality and what you can store and the size and the picture quality, it was the (human-machine interface).

“You will see (in-vehicle) cradles in the future; iPhone cradles,” he says. “And then some of the technology will migrate into the (vehicle).”

Does that mean the beloved compact disk player is headed for extinction a mere eight years from now?

To put it mildly, not everyone involved with in-vehicle entertainment agrees.

“I wish we were face to face, so you could see my reaction,” says T.C. Wingrove, senior manager-North American Innovation, Visteon Corp., during a telephone interview.

“I don’t think the CD player will be gone by 2015 at all,” Wingrove says.

No one quarrels with Homann’s rationale, or with the idea that youth-oriented brands might soon stop offering CD players.

It’s the concept of total extermination that gets folks riled up.

Skeptics say stubborn consumers, including an army of “late adopters” and semi computer-literate Baby Boomers will keep the conventional CD alive far longer than Homann envisions.

What’s more, experts at OEMs and suppliers say CD players and optical disk technology will continue to evolve and improve in order to remain competitive.

“The CD will disappear, but 2015 is too early,” says Nick Lontscharitsch senior vice president-sales, Preh Inc., a company that provides driver controls and advanced electronics for vehicle infotainment and navigation systems.

“We think more like 2020,” Lontscharitsch adds, “because 60-year-olds will not switch immediately to alternatives.”

Chrysler Group is leading the charge away from the conventional audio system layout with its innovative MyGIG, a navigation system that uses a computer hard drive to store navigational data, instead of an optical disk.

In addition to providing faster navigation, MyGIG can store about 100 hours of music, photos and other information.

Nevertheless, Mike Kane, director, feature innovation and advanced technology strategy-Chrysler, does not see the CD’s demise around the corner.

Conventional compact discs capable of holding an album’s worth of songs may indeed be headed for the same fate as the dinosaur and Dodo bird, Kane says, but “CDs are optical disks and the optical disk is probably around for another 30 years or so.”

That’s because new types of optical disks will be capable of storing hundreds of songs as compressed audio files instead of only a dozen or so.

Digital-rights management issues and the growing popularity of high-definition formats mean DVDs likely will remain the preferred method for viewing movies in vehicles for the foreseeable future, further preserving the optical disk’s turf, Kane adds.

“People are still going to want to watch movies in the back of the car, whether they are high-definition DVDs, or whatever, they likely will be a CD-sized disk,” says Mike Antrim, executive director-marketing, audio/video communications, Mitsubishi Electric Automotive America, a supplier of vehicle entertainment systems.

Despite the dissenting opinions, Homann makes a compelling argument for auto makers to eliminate CD players.

Their demise, he argues, not only will save auto makers $20-$40 per vehicle, it will free up valuable real estate within the car.

The center stack, where most CD players are located, is prime real estate for navigation systems which often share their displays with audio components, he says, and federal standards require screens to be positioned so drivers can view them without losing sight of the road.

“We have to be up as high as possible,” Homann says at SAE. “We’re having a hard time trying to package all that stuff, because of the size and shape of (CD players).

Even so, Chrysler’s Kane says it is possible to separate the disk player from the bulk of the rest of the equipment to free up space in the center stack while still providing a convenient interface for driver and passengers.

“We’re doing that in the future,” Kane says. “We’re disassociating components. The only thing the customer needs in the center stack is a display, center controls and a slot to put CDs.”

To a point, industry trends for factory-installed equipment support Homann’s prediction. Ward’s data shows that 19.6% of all ’06 cars built in North America for the U.S. market had MP3 capability – more than eight times that in the ’04 model year.

Over the same period, the proliferation of CD players slipped to 95.2% from 99.1%. Meanwhile, just 11.7% of cars featured cassette tape players in the period, down from 29.6%.

Related document: Percent Factory-Installed Equipment on ’06 Model U.S. Domestic Cars

But Visteon’s Wingrove says those figures actually illustrate how slowly consumers migrate to new technology. A surprisingly high 0.8% of U.S. consumers still purchased full-length cassette tapes in 2006, a format from the 1970s now considered obsolete.

Even more surprising, suppliers shipped more than 700,000 cassette-playing automotive head units to customers last year, Wingrove says.

“There are an awful lot of people in that boomer generation that bought an awful lot of CDs, who are going to be really ticked off if you don’t let them play those CDs in their car,” Wingrove says.

Furthermore, statistics from the Recording Industry Association of America show that 85.6% of sound recordings still are purchased on full-length CDs, down only five percentage points from the 2002 peak of 90.5%.

RIAA figures also reveal that consumers over 45 years of age purchase the most music, double the dollar-volume of 15-19 year-olds.

Despite the skyrocketing popularity of Apple iPods and other MP3 players, only 6.7% of recordings were purchased as digital downloads in 2006, according to the RIAA (although the figures do not account for illegal downloads).

The data suggest that while digital purchases are rising sharply, the vast majority of consumers are loading their MP3 players with music files from purchased CDs. Instead of then gathering dust, the CDs still are played on home or vehicle entertainment systems.

That’s due in part because most consumers, particularly aging Baby Boomers, do not have the time or are not computer literate enough to buy, download and organize digital play lists, says Preh’s Lontscharitsch.

“My idea is you drive into your garage and your (vehicle audio system) automatically synchs with the entertainment system in your living room. It should not be additional work. That’s when the CD player will disappear,” Lontscharitsch says.

In follow-up comments to Ward’s, Homann argues it won’t be long before consumers are able to take advantage of such enabling technologies.

“There is no arguing that not everyone knows how to handle a computer or operate an iPod, MP3, SD or USB connection,” he says in an e-mail to Ward’s.

“However, the technology isn’t far off that would allow a consumer to dial into a network from the automobile using basic commands to access music with the similar simplicity of searching through a CD collection at home,” Homann says.

“Not to mention, there always is the option of connecting a CD player through a USB in the glove box or other storage tray,” he adds.

– with Eric Mayne

[email protected]

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