North American Automotive Entertainment and Navigation Systems Market

New Products Flood the Burgeoning Market

“Emerging automotive entertainment and navigation applications such as satellite radio and compressed-audio (MP3) playback systems are providing fresh growth opportunities for the North American mobile

electronics manufacturers.”

Ground Transportation Analyst TeamFrost & Sullivan

• Relatively new applications - satellite radio and compressed audio systems - are expected to grow four times as fast as rear-seat entertainment and navigation systems

• Technological advances and increasing economies of scales continue to drive price declines

• Current high rate of innovation and new product introduction will continue through the medium-term (2003-2005) and slow down thereafter

• As applications mature and product-features/functions stabilize, manufacturers will increasingly integrate them into the radio head unit to provide a single point of control and to reduce form-factor and system cost

• Multiple product configurations will support a growing range of vehicle segments and customer demographics

Key Industry Trends

• DVD’s superior performance is driving rapid replacement of other storage media in multimedia applications

• XM satellite radio systems have gained a big early lead over Sirius system

• Vehicle owners with small children prefer systems with driver-operated single-point controls, while adults without children or with grown-up children prefer systems with distributed controls

• Greater ease-of-use of voice and touch-screen based HMIs is driving replacement of other HMIs

• Emergence of Integrated Driver Information Systems to cost-effectively support increasing range of applications, functions, and features in scarce vehicle space

• Wirelessly networked systems based on 802.11 and Bluetooth technology are under developed, expected to be commercially available by 2005

Industry Trends

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Who Will Benefit?

Rear-Seat Entertainment System Market:

• Video Monitors

• Video Source Units

• Audio/Video Distributor and Controller

• FM Modulators

• Infrared (IR) Remote Control

• Headphones

Navigation System Market:

• Display and User Interface Module

• Navigation Module (On-Board Computer and Optical Disc Drive)

• Global Positioning System (GPS) Receiver

What’s Covered

Satellite Radio System Market:

• Antenna

• Radio Receiver Unit (RRU)

• Radio Frequency (RF) Modulator

• Cassette Adapter

• Cigarette Adapter (For Portable Units)

• Radio Control Unit (RCU)

• Wireless Remote Control

Compressed-Audio Player Market:

• CD-R/RW-Based Players

• HDD-Based Players

• Solid-State Memory-Based Players

What’s Covered (Cont’d)

Key Market Participants

Alpine Electronics of America, Inc.Audiovox Electronics Corp.Blaupunkt USA/ The Robert Bosch Corp.Clarion Corp. of AmericaDelphi Delco Electronics Systems/ Delphi Corp.DENSO International America, Inc. Johnson Controls, Inc.JVC Americas Corp.Kenwood USA Corp.Lear Corp.Mitsubishi Electric Automotive America, Inc.Panasonic Automotive Electronics Co.Pioneer North America, Inc.Recoton Corp.Siemens VDO Automotive Corp.Sony Corp. of AmericaThales Navigation, Inc.Visteon Corp. (Automotive Systems)Xanavi Informatics Corp.

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