Note: Prices indicated are USD.

As the market for CD players, which represent half the business in mobile electronics, gradually declines, some suppliers say the low end is seeing a steeper fall than anticipated.

“Entry-level CD this year has fallen way short of everyone's predictions,” said Alpine's marketing VP Steve Witt. More specifically, industry CD player sales under $149 have fallen for the past five months, he said.

Pioneer also acknowledged the decline. In June, the company took action by introducing a $20 rebate on two low-end CD player models, bringing the price of the DEH-1700 down to $79. Rarely do suppliers offer rebates that early in the year, said industry members.

Pioneer's marketing VP Michael Townsen said, “We had thought entry-level CD would either be flat or slightly up because everybody's trying to cram more features into it.”

According to the The NPD Group/NPD Techworld, Port Washington, N.Y., sales for CD players under $200 declined 4 percent in units between January and August 2005, compared to the period in 2004. Similarly, dollar volume declined 6 percent. Data was not available for $150 and under.

Both Alpine and Pioneer, conversely, said their CD player sales in the over $150 category were up this year.

Both blame the high penetration of CD in new cars for the after-market shortfall, with Alpine claiming the CD penetration in new cars is now 100 percent, although only about half the cars on the road have a CD player. Townsen believes that the market is also suffering from competition with products outside the industry. “Maybe a consumer who might have purchased a $100 CD player is putting that money toward an iPod,” he said.

Despite the industry trend, Sony and Audiovox said the low end is one of their healthier segments in CD players.

Audiovox said the majority of its sales are at $129 and below and calls the upper end, from $149 to $499, the “no man's land” of the market. “That's a tough category until you make the leap to multimedia,” said mobile electronics senior VP Tom Malone.

Sony is taking the unusual step of introducing two models under $130 this month, well before the typical January sell in or the occasional early release in November or December.

Sony's mobile electronics general manager Andrew Sivori said the strategy is to give retailers time to change their demo boards before Christmas.

“We wanted to get the retailers behind the new product early enough so they could enjoy comfortable selling throughout the holiday,” he said. Retailers will also be under less pressure to keep holiday orders conservative, because the new products will continue in the line through part of next year, Sivori said.

New Sony models include the CDX-GT100 at a $99 suggested retail price and the CDX-GT200 at $129. The leader model has a front-panel auxiliary output, 52 watts by 4 channel output and a rotary knob controller (previously available at $179 and above). It also has a selectable subwoofer output and level control for the preamp output. The step-up model adds MP3, WMA and ATRAC 3 playback.

While acknowledging a general slowdown, JVC said sales of its low-end KDG 210 remain strong.

Author: Amy Gilroy
Source: Twice 24/10/2005

Interested huh?

I brought this exact thing up with Sony recently at their product launch in Sydney, when the product manager was talking about them focussing heavily on CD tuner single sales because this represented most of thier turn over. When I suggested it was perilous to put all of their effort into a segment that would potentially evaporate because new cars will feature CD tuners of equivalent quality across the board anyway from now on he didn't really have a reply.

When I then highlighted that their upper models should focus on features that most factory CD tuners will never offer (sub control, iPod adaptors, TA, good EQ, selectable illunination to suit all interiors and that sort of stuff) it still seemed a bit out of their grasp...

funny thing is ( for me anyway.) the brisbane supercheap chain have the cheapie sony units and they sell more of the panasonic ,kenwood lines due to reliablilty issues with the base spec sony. now considering that sony are basing the business on a semi unreliable product and not on top end ( as damon has said.) would be of some concern for all involved.

I'm waiting for them to pull the line out. ( I want one of the demo boards..)

I have also noticed a slowing of the market in general as of the last few months.

I bought an entry-level deck off you Chris, surely that helped

it did tom. ( got the new ones here now.. )

From the viewpoint of future generations, i see the market taking a sharp decline in the next few years...but i see the industry coming strong again in the near future. The staggeringly fast rise of information technology use/education in the up and coming...especially the abundance of cheap portable music (I havent seen a single uni student without some form of portable entertainment, be it even snake on their phones)....leads to believe in the rise of people wanting the ability to connect these portable music sources to their car's sound system.

A lot of people burn their own music.

And its all incredibly easy. Point, click, plug a headphone in.

Therefore i think that the first company to bring out an entry level cd/mp3 headunit, with an aux in feature MOUNTED ON THE FACE, is going to see a boom in the next couple of years. I personally can't fathom why OEM systems dont have some sort of RCA in port hidden away, be it in the glovebox or wherever, when they are integrating MP3 etc.

Some are pessimistic, citing a steady decline from the glory days. Some would say these trends in the lower end headunit market are just the final bell before the final nail. True, general car audio (not competition, i'm not equipped to comment on that) may have seen its peak, but i dont think the decline is going to be constant. I think it'll bottom out, and climb steadily again in the next decade.

interesting..

I there is one around but i would have thought that decks with a USB port on the front so you can use your generic flash drive to play songs would take off a bit. But then I agree with liquidity I would have thought RCA inputs on decks would have been pretty much a standard, I mean every other audio section in the market (home, computer etc etc) have AUX RCA inputs pretty much as a given.

That said I'm more than happy with just using CD's

I know of such a deck (USB on the front, also MMC/SD on the front, less than $500rrp)

yep viscom make it . axis make one as well. as for the integration on CD units into new cars slowing things I agree. I approached a dealer a few days back on upgrading the stereo in a suzuki jimny ( last one I worked on had a cassette) pointed out to me that it now had a cd player as std. this is on a $19990 drive away vehicle.

(I'm still working on a way to make a upgrade sale on these cars!)

Yeah I remember reading about one coming out somewhere, would have though some of the bigger brands would have jumped on this. I mean the iPod market is there and there are a lot of people with flashdrives and storage/MP3 players that function via USB. I mean a USB cable to the glove box or somewhere convient and it could be really good. But then you'd think RCA inputs would take off to.

didn't eurovox try this in the commodore though? ( think VR/VS) not sure howmany people used it but I pulled more of those units out than I saw the cables being plugged into.

as for the OEM side of things - dension do a IPod cable for BMW cars.
and there are USB players with FM Mod available now on the aftermarket side. I think that it would come down to the service side of things really. if holden introduced a unit with USB on it and they had issues 6-12 months after its release and had to replace all the units under warranty then they have a serious loss to cover one would think.

in short OEM hasn't won yet..