Ibiquity Has Significant Potential That Will Be Realized Through HD Radio

Implications: The new price point for HD receivers will mean signicantly more volume of units in automotive OEM applications, potentially surpassing one million units installed in OEM applications by early 2009. Unlike Sirius and XM, Ibiqiuty's HD radio is finding an audience in Asia and in Europe. Ibiquity is entering into unique partnerships with Apple and Navteq, that will enhance the functionality of HD radio.

Analysis: I am sure Ibiquity would like to see digital radio mandated like we have seen for digital television broadcasting. But even without that, HD radio will experience a steadily increasing presence as original equipment in automobiles in the US and abroad.

The new price point will bring in more consumers who will give HD a chance. And they will find a product that is as clear, if not clearer, than satellite radio. In additon, a business model that requires no monthly subscription as found in satellite radio. The experience of the consumer market, will also trigger more OEM's to offer it as standard or optional equipment. BMW, Mercedes,Ford, Hyundai, Jaguar, Volvo, and scion are already offering or wil offer later in 2008 Ibquity HD radio receiver technology as standard or optional equipment on most models. Expect to see more OEM's, including Scion parent Toyota, to follow suit in 2009 and 2010. This additional volume should push HD receiver volume over the 1 million mark for automotive OEM original equipment.
In addition, Ibiquity has entered into revolutionary content agreements with Apple to provide a mechanism for instant purchase through iTunes of songs heard on HD radio while in your car. An agreement with Navteq and Clear Channel provides access to real time traffic and weather that can be received through the HD receiver and broadcast as data for the vehicle navigation system. These types of collaborative partnerships are very representative of the infotainment content that will continue to be developed and marketed for OEM applications.

The OEM's are going to offer the content that the consumer desires. Whether this is satellite, streaming wireless internet, or HD radio, the automotive OEM's want to provide the entertainment capability and the instantaneous data access that will be standard equipment in the vehicle of the very near future. The platform for the data broadcast and reception will be the open point as infotainment continues to evolve.

Expect to see terrestrial radio continue to play a huge part in the future of automotive infotainment. And if Ibiquity continues to develop such novel partnerships and attractive pricing models, expect to see more and more vehicles, not only in the US, but worldwide, with HD receivers.