Audio the new in-car battleground, as OEMs wrestle for differentiation

As cars become more intelligent and connected, the immersive audio opportunity is accelerating through the automotive industry.

A new report from Futuresource Consulting reveals that more than 83% of new passenger cars will have embedded voice assistants by 2028. More than two-in-five will feature active noise control, and 3D surround sound will grow from less than 1% in 2021, to more than 26%. It’s a situation that is creating a raft of opportunities for the audio industry.

Connected, autonomous, shared and electrified

“Nearly every automotive OEM is undergoing serious digital transformation,” says Guy Hammett, Senior Market Analyst, Futuresource Consulting. “Their products are essentially becoming computers on wheels, generating vast amounts of data. What’s more, the C.A.S.E. concept, of connected, autonomous, shared, electrified vehicles, will celebrate its eighth birthday later this year, and it has moved far beyond a nebulous industry acronym. The numbers are really beginning to stack up.”

As examples, Futuresource notes that 81% of new passenger cars sold across the globe now have embedded connectivity, forecast to increase to 98% by 2030. By that year, 88% will have level 2+ autonomy and 53% will be electric. In addition, 14% of global passenger miles will be attributable to shared mobility services.

A new need for automotive differentiation

With this rise in autonomy and the deeper penetration of EVs, manufacturers are looking at other ways to differentiate. Improved connectivity, state-of-the-art processing and graphics performance, along with more and bigger screens, and premium audio systems are the new in-car USPs.

While Tesla led the trend of a large centre-stacked display, many manufacturers have now followed. Car interiors have evolved significantly, with most new vehicles now featuring large centre screens. Some manufacturers, notably in the premium segment, now allocate as much surface as possible to displays, as seen with the Mercedes Hyperscreen, which also provides a screen for the passenger.

“With all this hardware action, entertainment is playing a huge role in the in-car experience,” says Hammett. “Cars have become a viable channel for multimedia content delivery, from video streaming services to video games. Among the offerings, Tesla is providing Netflix as a native app on its infotainment systems, and BMW has partnered with the online gaming platform, AirConsole, to bring video games to future models.”

The significance of OTA software updates

“But hardware is far from the whole story. Over-the-air software updates are the real gamechanger. In the same way as our smartphones and other connected devices can be improved during their lifecycles, OTA is opening up a multitude of automotive opportunities.”

Futuresource research shows that these opportunities include the easy introduction of new content features or partnerships with content providers. OTA updates will also allow for continuous improvements to personalisation and customisation engines, which will help enhance the consumer experience with tailored content recommendations. Compatibility with new content formats, as well as audio technologies, could also be enabled. New audio features, DSP improvements or even the introduction of new business models, such as speaker-as-a-service, also become a reality.

And while time-to-market for new automotive features and technologies has always been lengthy, OTA updates allow current vehicle fleets to benefit from the latest technologies and features.

One specific example is Dolby Atmos. Until recently, it required a high-end audio setup to deliver an optimal immersive experience. Head units also had to meet a minimum hardware requirement. However, a recent software update has drastically lowered the ceiling for Dolby Atmos compatibility. The update adds support for Dolby Atmos in vehicles with a standard system with as few as four speakers, and it could be delivered through an OTA update.

AI making a play

“Keep an ear to the ground for developments in AI, too,” says Hammett. “It could be used for everything from leverage listening habits and interactions to recommend content, to improving the up-mixing of content to create more immersive experiences, as seen with Dirac and Dolby’s technologies. AI could also adapt noise cancelling systems, alerting car occupants to noise from police cars, ambulances, or built-in safety systems.”

Futuresource Consulting’s Automotive Audio Market Analysis and Review of Key Trends report assesses the current state of the market and provides an outlook on the evolution of the sector over the next five years. For more information or to make a purchase, please contact Ben at ben.thrussell@futuresource-hq.com.