More automakers tune in HD Radio, but Japanese lag

DETROIT--HD Radio is getting a better reception from automakers, says Robert Struble, CEO of iBiquity Digital Corp., the Columbia, Md., company that developed the technology.

HD Radio debuted in 2005 as a standalone option on two model lines in the United States. Today it is offered by 15 brands, as standard equipment on 36 model lines and as part of an option package on 50 additional lines.

Volvo, BMW and Rolls-Royce offer it as a standard feature. Other brands offering the technology include Mini, Mercedes-Benz, Jaguar, Land Rover, Ford, Lincoln, Mercury, Volkswagen, Audi, Kia and Hyundai.

As for Japanese brands, says Struble, "Stay tuned." The only Japanese brand offering it now is Toyota Motor Corp.'s Scion subbrand.

Sales of automotive HD Radio receivers have soared. In the nine months that ended June 30, 438,000 were sold, up from 251,000 in the 12 months through Sept. 30, 2009, and 57,000 in the year before that. Together with nonautomotive receivers, more than 3 million units are in use.

But in an interview with Automotive News last week, Struble admitted HD Radio hasn't achieved critical mass. "We need to be 5, 10 or 15 million to be critical," he said.

A number factors have fueled HD Radio's growth. They include:

-- Lower costs. Five or six years ago, each automotive unit cost about $150 to $200, and automakers sometimes charged close to $500 for the option. Today the cost of an automotive unit is $20 to $30.

-- Less competition from satellite radio. Struble is quick to say he views satellite radio as "complementary" to HD Radio, not a rival. But users of satellite radio have leveled off at around 18 million to 20 million for the past few years, while about 300 million consumers listen to over-the-air radio.

-- Nearly nationwide coverage. HD Radio reaches 50 to 88 percent of the audience in each of the top 25 U.S. radio markets, except for Puerto Rico.

Put another way, 4,000 radio stations account for 90 to 95 percent of U.S. radio listeners and revenues. Currently, 2,085 offer HD Radio broadcasts.

"We need 3,000," said Struble.

-- Enhanced features. HD Radio's original pitch was that it made AM sound like FM and FM sound like CDs. Now it's offering more.

New features include tie-ins to real-time traffic services and iTunes tagging--allowing a driver enamored of a song on the radio to press a button to queue up the song for purchase at the iTunes store.

(Source: Automotive News)