By Gautham Hedge, Senior Research Analyst – Mobility
Connected technologies are enabling cars to become extensions of customers’ digital lifestyle, even as they are unlocking a host of associated growth opportunities. One such beneficiary is automotive audio technology – basic audio, surround sound, and 3D audio – which, in North America alone, is set to grow from a $3.33 billion market in 2023 to $4.42 billion in 2030.
Growth in the automotive audio market is being propelled by connectivity trends that are supporting continuously improving in-vehicle audio entertainment. Advanced technologies are allowing for personalized audio solutions with the added advantage of being able to adjust audio quality to suit a range of intended uses. Enhancements in speaker technology are encouraging the uptake of branded audio systems and nudging the market toward high quality immersive surround sound and 3D audio experiences. In the future, software-defined vehicles (SDVs) will support seamless over-the-air (OTA) updates that will continually improve audio acoustics, while expanding the number of available features on demand (FoD).
To learn more, please access: Growth Opportunities in the North American Automotive Audio Sector, 2023-2030, or contact [email protected] for information on a private briefing.
Basic audio to cede ground to surround sound and 3D audio
The automotive audio technology market in North America is projected to record a 4.1% CAGR over 2023-2030. While basic speakers will continue as the primary audio technology, it will gradually decline, and growth rates will be disappointing. In comparison, technologies such as surround sound and 3D audio will register strong revenue and unit shipment growth over 2023-2030.
Leading audio Tier II and Tier I suppliers are gearing up for a future of multi-faceted speaker technology ranging from feature upgrades based on branded audio software to exploring zonal audio. Advanced audio technologies have become a standard offering in premium vehicle brands, while branded audio systems are being offered as upgrade options in more mass market models. Accordingly, D, E, and F segments have advanced audio technologies, while entry level pick-ups, multi-purpose vehicles, and vans are looking at integrating basic audio products.
Today, both premium and mass market OEMs are seeing rising demand for branded audio systems. Sophisticated software-driven digital signal processing will push audio technology use cases toward mobility-as-a-service (MaaS) and connected-living-as-a-service (CLaaS).
Advanced audio technology to become standardized offering
The market has a mix of Tier 1 suppliers, audio suppliers and OEMs with competition revolving around performance, cost, innovation, technology, and brand awareness. Harman, Panasonic, and Bose currently lead the market, followed closely by Alps Alpine and Sony.
Harman’s comprehensive offerings span audio and connected car integrations. Its wide ranging speaker technology and audio software proficiencies, including Harman Connected Services and infotainment capabilities, fulfil varied sound technology demands from OEMs. Bose and Sony offer expertise in advanced audio systems, while Alps Alpine and Panasonic are known for their hardware speaker systems and their innovative software-driven electric vehicle (EV) audio technology.
As of 2023, a majority of OEM brands – barring several premium brands and some mass market brands – offered basic audio technology. Premium brands, including Audi, BMW, and Mercedes-Benz, and a few mass market OEMs, such as Chevrolet, Ford, and Toyota, offer 3D audio and surround sound. By 2030, we anticipate most OEMs, particularly mass market OEMs, to switch from offering basic audio technology to surround sound technology. Premium OEMs, meanwhile, will attempt to achieve competitive differentiation by moving onto advanced spatial 3D audio technology.
Improving Brand Value
As C.A.S.E use cases increase, OEMs will need to incorporate innovative audio technologies with features that target specific use cases. OEMs / Tier I suppliers must evaluate audio system-on-chip modules that delink expensive hardware from in-vehicle audio, while enabling better quality control, improved functionality, cost savings, and faster time to market. Focusing on use cases like surround sound with augmented reality (AR) features or 3D/4D audio with gaming will present added value and expand to reach a younger customer cohort.
With inputs from Amrita Shetty, Senior Manager, Communications & Content – Mobility
