The evolving anatomy of automotive audio: market on track to achieve $29bn by 2027

Many drivers and passengers now expect an audio entertainment experience which is in tune with home and personal offerings. And the expectation is growing. As a result, automotive brands are using their audio solutions as key differentiators, as well as adding increasing emphasis to branded audio in their advertising and promotion.

As the market continues to gain traction, an industry bulletin from Futuresource Consulting shows automotive audio system revenues will achieve $25 billion worldwide by the end of 2023, rising to $29 billion by 2027.

Audio integration baked in

“This upsurge is presenting a raft of opportunities and challenges for the consumer electronics industry,” says Guy Hammett, Senior Market Analyst, Futuresource Consulting. “With the rise of software-defined cars, OEMs are developing zonal electric/electronic architecture, which enables control units to be simplified, allows continuous software updates, and opens up through-the-lifecycle monetisation opportunities.

“What’s more, audio systems are increasingly being designed as an integral part of the overall vehicle development program, rather than as an optional afterthought. Plus, with the help of advanced DSP techniques, vendors such as Harman and QNX are enhancing the quality of basic audio systems by tweaking the software. These cost-effective solutions enable non-premium speakers to deliver a better experience, with claims of an improvement of up to 20%.”

Weight reductions necessitate new innovations

At the same time, vendors such as LG and Continental have developed audio components that reduce weight and save space in the car interior without compromising the audio experience. A key consideration as electric vehicles move mainstream. Earlier this year, LG unveiled its invisible speaker, a thin actuator that vibrates off display panels and other materials inside the car body to enable a rich, 3D immersive sound experience. It’s a new frontier of connected audio innovation.

Aftermarket on the wane

Such deep-level integration is impacting aftermarket solutions, and Futuresource notes that this segment is in slow decline, currently accounting for around 13% of total revenues. This is leading to a migration towards the OEM category, with many aftermarket operators further extending their diversification into telematics and driver assistance solutions.

A fully connected automotive future

“Car cockpits have undergone a revolution, and the battle for the driving seat is well underway,” says Hammett. “While Harman’s multiple brands give it an enviable 58% global share of the branded car audio market, there’s a lot more going on under the hood.

“The landscape has shifted from a single screen model, to a combination of multi-modal inputs, multiple large touchscreens, voice assistants and gesture control. Driven by Google’s and Amazon’s initiatives to exert influence on the connected car ecosystem, voice assistant integration is becoming ubiquitous across both factory-fitted and aftermarket solutions. Moving forward, we’re going to see total focus on enhancing the user experience, with evermore intuitive and efficient human-machine interface solutions, and the integration of complex and sophisticated head units within the cars we drive.”

For more information on Futuresource Consulting’s research into automotive audio, or to attend Audio Collaborative, which will feature a dedicated insights session on the topic, please contact leon.morris@futuresource-hq.com.