(Will) iPod (and Ford) Kill the Radio Star?

ipod.jpgApple 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.

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2 Responses

  1. Paul Gowder says:

    Why exactly is it that someone can’t just reverse engineer the ipod to produce a device that will work with itunes? Is there an intellectual property issue here? (If so, what would it be? A patent on the particular encoding? Someone who knows more patent law than me should chime in here…)

  2. Huh McHuh says:

    Well, if it’s anything like the so-called iPod “connectivity” BMW promises with its cars, radio has nothing to worry about. BMW lets you get an option that offers direct hookup via the glove compartment — but the result is nothing close to iPod’s full functionality. Instead, you have to create 10 playlists ahead time (on your computer), which are the only selections you can choose from. You don’t go through the iPod’s interface, either — it’s completely shut off, and you have to go through the stereo interface. All in all, you get maybe 25% of the iPod’s functionality. It’s an embarrassment of an option. I hope these car makers offer something better, but the announcement wasn’t inconsistent with what BMW “offers” now.