Despite Slow Start, Satellite Digital Radio Industry Will Flourish

    OYSTER BAY, N.Y., April 25 Although 2001 will mark a disappointing launch for 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. By 2006, recurring annual service
revenues for SDARS will reach $350 million, according to the findings in "The
Digital Car: A Strategic View of Global In-Vehicle Communications Technologies
and Next-Generation Telematics Systems," a new study from Allied Business
Intelligence (ABI).

    "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 report. "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 mcommerce and other
value-added services when SDARS are coupled with telematics systems in the
future."

    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, real-time traffic information and server-based navigation.

    The world telematics market for personal vehicles will rise from
$3 billion in 2000 to almost $13 billion by 2006, while recurring annual
revenues for services alone will account for over $4 billion of that 2006
total, according to the study's findings.

    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 realized that the automotive design cycle cannot keep up
with the electronic design cycle, so the need for a common, high-speed
in-vehicle data bus has become abundantly clear. The study 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.