In car WiFi radio may kill traditional radio listening

Much has been written about the potential of Wireless Internet and the flexibility that comes with more wireless devices and increasing Wi-Fi locations. But what about the impact on traditional radio listening of Wi-Fi or its wide-area cousin, Wi-Max, once the technology is available in-car?

During July/August 2007, Bridge Ratings undertook a broad-based US study of this question by interviewing consumers and device and auto manufacturers to better understand the implications of wireless Internet and the availability of Wireless Internet Radio.

Today 30 million Americans use wireless Internet access and it will grow to nearly 45 million by the end of 2007. Wi-Fi locations are sprouting up across the U.S. making wireless Internet access a comfortable reality for millions of consumers.

Of the estimated 30 million users of wireless access technology in the U.S., 75% or 23 million have wireless accessed Internet radio. In fact, 48% of those accessing the Internet via wireless technology seek out Internet radio. The number of Internet radio listeners accessing wirelessly will grow to 77 million by 2010 as wireless technology penetrates the average U.S. lifestyle.

ABI Research forecasts that the total number of Wi-Fi-enabled consumer electronics devices will grow from just 40 mln shipped in 2006 to nearly 249 mln in 2011.

Mobile WiMAX customers will grow at an annual compounded rate of 64% between 2009 and 2012, when telecoms embrace WiMAX as a fixed wireless broadband service, according to Pyramid Research.

Wireless Internet use in-car faces hurdles based on Wi-Max technology development, how quickly auto manufacturers are able to equip new cars and what type of early adopter consumer will want the technology.

In Bridge Ratings study of 2200 persons 16+ they asked consumers who define themselves as "innovators" or "early adopters", how likely they would be to buy a car or equip a current vehicle with a wireless Internet device.

By year 5 of in-car Wi-Fi acceptance, traditional radio can expect to see the amount of time spent listening to fall below 19 hours a week and by year 8 when we project that more than 23% of the U.S. public will have adopted wireless Internet technology in-car, weekly time spent listening to traditional radio will fall below 18 hours per week.

During the focus groups that accompanied this study, monthly subscription costs was of lesser concern than the quality and variety of available content. It was generally assumed that the monthly cost of satellite radio and in-car Wi-Fi reception of Internet Radio would be comparable. Yet, those who currently subscribe to satellite radio expected to listen less if they had wireless Internet radio in their cars or they would cancel their satellite radio subscription.

The availability of wireless Internet in-car poses a signficant threat to traditional as well as satellite radio. This study projects that the growth of Wi-Fi in-car should reach more than 50% of the U.S. population after nine years of market availability.

It is important to note that adoption by the masses of new technologies is often slower to penetrate the mass market. New technologies take time to be widely adopted and it is important to note that innovators and early adopters who jump on new technology often receive an inordinate amount of press which quickly raises awareness of the adopted technology.

The adoption of in-car Internet service and the spread of Internet radio across all consumer types will begin to be a factor 9-10 years after market introduction.

Diffusion of technology through to the mass market, rather than the innovation ultimately determines the pace of acceptance and this is the reason for the generally long growth pattern you see in this report's projections.

Nonetheless, the results of this study show that early adopting consumers are looking forward to Wireless internet in-car and current listeners of Internet radio have a very high probability of adopting the technology when it becomes available and is affordable.