HD Radio Unit Sales to Reach 7.5 Million This Year, iBiquity Says

The growing HD Radio sales, largely through AV receivers, desktop, portable and automotive radios, have come despite the technology’s failing after years of efforts to find a home in rapidly growing tablets and smartphones. HD Radio’s efforts in mobile began with standard cellphones (CED Nov 25/08 p3) and continued with a push for tablet and smartphones deployments in 2012 (CED Oct 1/12 p3). About 50 new HD Radio receivers were demonstrated at CES, about 30 of which were car aftermarket products. Alpine, Clarion, JVC and Sony are expected to field HD Radio receivers this year. HD Radio-enabled tablets also were shown at CES and iBiquity is working to land retail distribution, Struble said. Since launch in 2004, about 17.5 million HD Radios have been sold, 15 million of which are installed in vehicles, iBiquity has said. The listening hours for HD Radio increased to three billion in 2013, up from two billion the previous year, Struble said.

The barrier for HD Radio in smartphones has been that handset suppliers and wireless carriers were slow to activate the FM analog chips already built into the products, industry officials said. Once the FM activations are widely deployed, HD Radio becomes a viable option for smartphones, Struble said. IBiquity’s in-band on-channel digital radio technology is used by 2,200 U.S. AM/FM stations to transmit digital audio and data immediately above and below a broadcaster’s standard analog signal. But only Sprint has moved to activate the FM chips in select models including the HTC One, Samsung Note 3 and Samsung Galaxy III S, and the Moto G 3G smartphone that went on sale at the carrier’s Boost Mobile no-contract service earlier this year with a $129 price and $55 monthly fee that carries a 2.5 GB data cap. About 1,600 radio stations have added HD2/HD3 channels, while 10-12 also have HD4, the first of which launched in 2009 on CBS Radio’s WJFK-FM in Washington, D.C. Whether others carriers, notably Verizon and AT&T, will activate FM chips remains to be seen, since paid streaming services have proved profitable especially when coupled with data caps, industry analysts have said.

"The phones are more complicated in the U.S. because you have to follow the analog broadcasters, where the core issue is there are no FM chips on the phone or there are but they aren’t turned on,” Struble said. “Different listening patterns” could lead HD Radio to be introduced first in smartphones in international markets, Struble said. “There is a pretty good uptake, user experience and revisits” among Sprint customers with the FM service, “so ours is a little bit longer play given the state of basic analog radio in phones,” Struble said.

About 200,000 users have signed up for FM terrestrial radio through Sprint since the carrier launched the service last August using Emmis Communications’ NextRadio app and the HTC One smartphone, Emmis CEO Jeffrey Smulyan has said. The NextRadio app received 7,000-8,000 downloads in the first week it was available in August, with more than 1,000 stations tuned in by Sprint subscribers, 15-20 percent of whom used the app for 20-30 minutes each day, Emmis Chief Technology Officer Paul Brenner told Radio Ink Magazine.

"When we first went in to the handset guys and carriers” about building HD Radio into smartphones, “they looked at us funny because they didn’t have analog radio in there yet,” Struble said. “It’s a two-step hop and the broadcasters are working hard to accomplish the first one and then we will come in right behind.”

While iBiquity once weighed plans for an IPO (CED Nov 8/05 p3), the HD Radio business is “very strong and profitable” and the company has a “bunch of cash in the bank so additional financial dealings would be more for liquidity because we don’t need investor capital,” Struble said. IBiquity generates revenue from licensing its technology, Struble said. Struble declined to disclose iBiquity’s annual sales. IBiquity raised more than $300 million prior to 2008 from a range of investors including Grotech Capital, Intel Capital, JP Morgan Partners and New Ventures Partners. IBiquity last raised $20 million in 2009, Struble said. “We haven’t had a need to raise money in a long time and the business is strongly profitable,” Struble said.

NXP Semiconductor, Silicon Labs, STMicroelectronics and Texas Instruments remain the main suppliers of HD Radio chips, with Siport having largely left the business after its sale to Intel, Struble said. At the low end, Amazon Thursday had Voxx International’s AudioVox iHD-PO1A arm band HD Radio and Sony’s XT100 tuner priced at $59 and $79. Amazon also had Best Buy’s Insignia brand portable HD Radio promoted at $119. The cost of HD Radio module has fallen into the $8-$10 range from $20-$23 in 2008, while the chips are around $3, a drop from $10-$12, Struble said. Many manufacturers are cutting costs by installing HD Radio chips directly on the printed circuit board, Struble said.

"We do really well at $99 and up, but if you are talking about a $29 clock radio, that’s a little bit harder to add technology to,” Struble said. “There is still a vast part of the market that’s under $79 and we have to continue working on materials cost reduction.”