Pandora: Aftermarket Yes; OEM, Not so Much

Amy Gilroy April 6, 2011 1

Pandora in the car may prove to be a bigger hit in the aftermarket than in new cars in the foreseeable future.

As 2011 Pandora car radios from Pioneer, Kenwood, Alpine and others hit store shelves, there’s a lot of dealer optimism for the feature and many industry members say Pandora products are moving well.

And in a reversal of recent trends, the OEM market may see lesser results.  Internet radio  may be too complex or just too esoteric for the new car buyer.

Pandora gaining steam in the car aftermarketStrategy Analytics just released a report that found only 3 percent of new car buyers see Internet Radio as a must have feature. Pandora usage is less than 5 percent in new cars. Those who have the capability, use Internet Radio less than once a week or not at all, said the report. But analyst Chris Schreiner says the aftermarket may see better results. “I see it as more of an intriguing feature there…The aftermarket is a slightly different story…they are more tech-savvy than the OEM market…,” he said.

For OEMs, he concludes, even though Pandora will be available on GM, Ford, Hyundai, Mercedes-Benz, Mini, and Toyota vehicles, and iheartradio is catching up, “our research suggests that consumers are much less enthusiastic about internet radio than the industry believes.” Consumers are concerned about the cost and the usage is low. He says, “the hype needs to be toned down” by car makers.

So here is a case where the aftermarket’s long time business model may shine through. It was first to market with Pandora control and it’s got the right clientele for the feature: technology/music enthusiasts.

Again, it’s early, but some leading retailers are enthusiastic. Seattle-based Car Toys’ Jim Warren said, “Pandora products are selling through quite well. Typically, the Pandora feature is packaged in with other step up features so it is difficult to isolate the impact of the feature by itself. Regardless, we love seeing our suppliers adding step up features that connect the smartphone to aftermarket car audio.”

Mehdi Narimanian of 4-store Sound of Tri-State in Claymont, DE said Pandora interest is high. “I think by next year this time next year, Pandora will be a must have feature.”

Several retailers told us customers are not yet asking for Pandora, but they are optimistic that it will catch on.  So time will tell.

Aftermarket suppliers say they wouldn’t have expanded the feature from only a few units in 2010 to dozens in 2011 were it not for budding demand and dealer enthusiasm. Pioneer’s Larry Rougas said, “A direct comparison to last year’s success is difficult as we have expanded our Pandora line-up from two to nine models as well as offering the feature at a much lower price of $150,” but he said, “We are very pleased with Pandora as a strong feature in our car products and we are continuing to look at different ways to expand our connectivity offerings to consumers.”

Alpine said that Pandora control is offered on 60 percent of the 2011 radios that shipped in March.

Alpine and Pioneer were first to offer car radios with control over a PandoraLink app running on a iPhone last year. Pandora-, iheartradio- and/or Livio Radio-control is also available (or soon will be) from brands including Kenwood, JVC, Sony, Audiovox, Rosen and DICE.

Pandora’s January statistics show 80 million registered users. To date, the Pandora app has been downloaded more than 50 million times onto smartphones in the U.S., said Pandora.

Source: CEoutlook and Strategy Analytics

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One Comment »

  1. virgil mascarenhas April 6, 2011 at 3:02 pm -

    Although i use Pandora, I prefer Rhapsody. I don’t understand why manufacturers have not made any arrangements with Rhapsody other than the fact it is not free, but no more costly than sat radio. One thing that could threaten Pandora and Rhapsody’s popularity is the decline of unlimited data packages for smartphones.