(Will) iPod (and Ford) Kill the Radio Star?
Apple has announced a new partnership with major automakers to make 2007 model cars iPod-ready. According to the press release:
“We’re delighted that Ford, General Motors and Mazda will support iPod connectivity in nearly all of their new models,” said Greg Joswiak, Apple’s vice president of Worldwide iPod Product Marketing. “Now more than 70 percent of 2007-model US automobiles will offer iPod integration, with General Motors alone making it available on all 56 of its models, representing millions of cars and trucks.” Ford and General Motors will feature iPod integration in the majority of their 2007 models in the US beginning later this year, while Mazda’s entire global 2007 lineup of cars and SUVs will offer iPod connectivity. iPod offerings for Ford, General Motors and Mazda provide drivers with outstanding sound quality while charging the iPod, while conveniently storing the iPod in the glove compartment. Seamless iPod integration also allows drivers to use their car’s multifunction controls to select their music using artist, album, playlist or shuffle songs, as well as to easily skip between tracks and playlists.
Presumably, this is bad news not just for makers of iPod/radio adapters, but also for Sirius, Clear Channel Radio, and other companies whose revenue depends on folks travelling without their own music. Indeed, Sirius’s stock price was down 1.5 percent today.
A tangential question is what effect, if any, these agreements will have on the market for MP3 players.
The key fact we don’t know is whether Apple has convinced the automakers to make the interfaces incompatible with other MP3 players. If so, arguably these agreements give Apple another defense against incursions into its market. (For more on this issue, see Christine Hurt’s discussion of iPods and network effects, my post on the behavioral economics of the iPod warranty, and Josh Wright, Larry Ribstein, and Manfred Gabriel’s rejoinders).
I suppose I should be happy about this advance in the fight to be able to sing along to The Shins in the car, but I’m not. As I predicted here, my iPod just died. And I bought a 2005 Mazda3, and so I’ll have to pay to get it retrofitted when I buy a new mini. Nuts.