Internet radios

	The iR23 from City Electronics of Hong Kong combines a Wi-Fi Internet radio, iPod dock and digital-tuning stereo FM radio.

Internet radios in Hong Kong are headed for mass production.Taiwan’s output approximates
its DAB radio production.

Internet radios are dominating next-generation radio production in Hong Kong and Taiwan. Most models combine Wi-Fi with the Internet radio function.

DAB radios and HD Radio tuners continue to be available from some Hong Kong suppliers, but new product releases are not as frequent as before as some suppliers have phased out DAB radios from their offerings due to weak sales. On the other hand, Taiwan makers’ market for DAB radios is still strong, fueling production efforts in the region.

In H1 2008, Hong Kong suppliers expect to offer Internet radios using homegrown designs. For faster time to market, other suppliers use housing designs they have already used in other radio products—more to demonstrate their capability rather than to make buyers settle for look-alikes.

Taiwan makers believe that the introduction of digital broadcasting in many countries, the increasing number of new releases and the development of digital content are key factors that would propel a market takeoff for DAB and Internet radios.

Prices of Internet radio models are expected to go down as production increases in both regions. If IC solution makers decide to enter the Internet radio segment, then low-cost modules could further drive the supply growth for Internet radios by H2 2008.

	Hong Kong supplier Qanstar’s WF800 Wi-Fi Internet radio supports more than 25,000 live or on-demand Internet radio stations.

Makers, however, know they have big obstacles to overcome before Internet radios emerge as the next big thing in radio listening. They need to widen the limited public awareness about Internet radios. They also have to make the products more affordable.

Internet radio models from Hong Kong makers have additional iPod docks and PLL-tuning FM radios. Mono digital screen is a standard feature, with up to three lines and 16 characters. Blue backlight is included in many models. Wired LAN connection is either built-in or optional, and a selection of audio input and output connectors is provided. Speakers are typically built-in, not exceeding 5W rms. Most units are no bigger than a shoebox but require AC power connection. Remote controls and AC adapters are standard accessories.

Sysbay International Technology Ltd recently launched two Internet radios integrated with iPod charging docks. The Db80 features a blue-backlit LCD screen, 10 preset stations, 802.11b/g Wi-Fi module and TCP/IP port. With nine rubber control buttons, the device supports Windows Media Player functions when connected to a PC. It includes an MMC/SD card reader and a USB 2.0 host. Audio out, audio in and remote control are included. An FM tuner is optional. Sysbay’s Dbs008 stereo speaker is designed to match the shape, style and functions of the Db80. The unit can support a wide range of tones with two treble speakers and a bass speaker at the base.

Sysbay’s other Internet radio, the Db70, has an integrated speaker. The Db70 has similar functions as the Db80 except for the built-in rotary buttons and the absence of a USB port. The speaker grille features a distinctive snowflake design. Other patterns are available depending on customer preference.

Sysbay also offers a DAB Band III radio with eight preset stations, FM tuner, LCD screen with LED backlight, auto/manual search function, headset jack and USB port. L band is optional.

City Electronics Ltd’s iR23 combines a Wi-Fi Internet radio, iPod dock and digital-tuning stereo FM radio. The unit comes with a large, two-segment dot matrix LCD: a 2x16-character screen on the right side and a four-digit clock display on the left. It has a 2x2W speaker output, auxiliary in, LAN port for broadband connection and earphone jack.

Measuring 150x64x150mm, the iR23’s dual alarm clock can be set to wake by radio, iPod or buzzer. Ten preset memories each for Internet and FM radio are enabled. The iR23 is AC-powered and includes a remote control and adjustable connectors for the iPod dock.

The iR28 from City Electronics is another Wi-Fi Internet radio with an iPod dock and a digital-tuning stereo FM radio. It is wider than the iR23 by 110mm and has metal grilles on the front speakers. The speaker output is also higher at 2x3W.

City Electronics also supplies HD and DAB radios. Its DAB radios feature Band III, PLL-tuning FM radio, audio in, line out, 2x16-character LCD screen, eight non-volatile preset stations per band and auto DAB station preset scanning. Other combo products such as DAB+iPod dock+PLL radio, DAB+PLL radio, DAB+PLL+Internet radio and HD+iPod dock are also available.

Qanstar Development Ltd has released the WF800, a Wi-Fi Internet radio that supports more than 25,000 live or on-demand Internet radio stations. The model comes with a graphic menu for easy navigation and plays Real Audio, MP3 and WMA files. It features a 2W rms speaker output, three-line digital screen, earphone out, rotary volume control and channel controls, as well as clock and alarm functions. The WF800 is powered through an AC adapter. It measures 250x135x130mm and comes in white and black.

The WF630 and WF810 are two other Wi-Fi Internet radios from Qanstar. The front panel designs are different from the WF800 but the functions are similar. Wired LAN connection is optional for all models.

A major challenge for Internet radio suppliers is to make their products easy to configure for the average user. Until Internet radios become ready to use out of the box like most free-to-air radios, its market will continue to exclude most elderly and non-computer savvy users. City Electronics is working around the clock to introduce full Wi-Fi auto setting in its Internet radios for users without any knowledge of how to set a wireless router.

	Taiwan’s ASUSTek offers the AIR, a new Internet radio that supports up to 10,000 radio stations. The unit has wireless connectivity and PC-free capability.

In Taiwan, DAB radios and Internet radios have different market bases, making it difficult to predict which line would take over the other. In general, the advantages of Internet over DAB models are the former’s support for more than 10,000 Internet radio stations, higher audio quality, scalability in the receiving stations and audio-on-demand feature that enables users to listen to digital content without a time limit. On the other hand, DAB radios are believed to address the regional market for local usage. Moreover, DAB radios can be integrated into other handheld devices.

According to interviewed suppliers, there are several enhanced features for Internet radios, such as PC-free capability, wireless transmission, multiple languages, the My Favorite Station function, built-in timer and MP3 format support.

ASUSTek Computer Inc., a leading IT company on the island, recently released an Internet radio that can support more than 10,000 worldwide broadcast stations. The product supports both wireless (802.11b/g) and LAN (DHCP) connections.

The AIR requires no PC connection to operate. The company noted that when a desktop is used to listen to Internet radio, it consumes power up to 300W per hour. For a laptop, power consumption is down to 65W. However, with the AIR, power consumption per hour is only 8W. In addition to PC-free capability, the AIR is also embedded with the My Favorite Station function, enabling users to save up to 250 preferred stations. Users can add new radio stations by inputting the URLs of the stations into the unit.

Multimedia function is also incorporated into the AIR. The product can play MP3 files from the user’s MP3 player or another device through the product’s speakers. Also, the unit has eight built-in languages—English, German, French, Spanish, Japanese, Korean, traditional Chinese and simplified Chinese.

For Deepsound Tech. Co. Ltd, Wi-Fi connectivity and Universal Plug and Play (UPnP) are two major enhanced features. The company’s product, the IR-D, is an Internet radio with Wi-Fi and Ethernet connectivity. The product comes with built-in speakers, an RCA lineout and an earphone jack for analog audio signal. The IRD supports up to eight languages. Product dimensions are 250x130x135mm.

Goldteck International Inc. recently released a DAB radio, the MSU-2030. The product is an enhanced version of its old model, the MSU-2020. The supplier integrated an iPod dock feature in the new release to satisfy market demand. Compared with its predecessor, the MSU-2030 is more affordable. It also features a CD slot; supports playback via USB, SD and MMC; and displays the ID3 tag and RDS text on the LCD screen. For future product development, Goldteck plans to replace its product line’s CD players with DVD players in Q1 2008. The company is also considering incorporating Internet radio functions by the end of the year.

	Deepsound of Taiwan offers the IR-D, an Internet radio featuring both Wi-Fi and Ethernet connectivity. The unit supports UPnP and up to eight languages.

The Internet radio module is the major component of an Internet radio, accounting for almost 70 percent of the total product cost. The iPod dock, on the other hand, adds less than $5 to the product’s value. Suppliers are optimistic that once the production scale for Internet radios increases, the cost of the Internet radio module would go down.

“The early Internet radio modules were not very stable so we did not develop our own model right away. When the new modules proved much steadier, that was when we decided to develop and release our Internet radios,” said Daniel Chan, marketing manager at Hong Kong manufacturer Qanstar, which uses Internet radio modules from Reciva.

HD and DAB radios from City Electronics are priced at about $55. Internet radios with iPod docks are quoted at $68 to $70, with iPod license fee included. City Electronics requires a minimum order of 5,000 units.

Qanstar’s Wi-Fi Internet radios are available for about $75, FOB Hong Kong, for a minimum order quantity of 1,000 units.

	Hong Kong maker Sysbay’s Db70 Wi-Fi Internet radio includes an iPod dock and a snowflake design for its speaker grille.

Digital radios from Hong Kong and Taiwan suppliers are manufactured primarily for export. For Hong Kong makers, the natural key markets are regions where digital radio broadcasts exist—Western Europe, Northern Europe, Australia and Japan for DAB and the United States for HD Radio. Internet radios in particular, however, have no geographic limitations and can be sold anywhere with a broadband connection.

Major markets for Taiwan makers are North America, Western Europe, East Asia—mostly Japan—the Middle East and Australia. New Zealand also contributes to the makers’ export value, while Germany is an important market in Europe. South America and the rest of Asia are being eyed as the next export markets for Taiwan manufacturers.

While buyers of Sysbay’s DAB radios come mostly from Western Europe, the Hong Kong maker expects its Internet radios to become equally popular in its other key export markets, including Northern Europe, Chile, Mexico, Japan and Thailand.

City Electronics, cited as an Outstanding Quality Manufacturer by RadioShack in 2001, exports its DAB radios to Western Europe, Australia and Japan. One of the manufacturer’s customers owns more than 50 percent of the market share in the United Kingdom.

City Electronics’ HD Radio tuners are shipped mostly to the United States.

At Qanstar, the United States, Europe and Japan are the main export markets. The OEM service provider counts Wal-Mart, Coca-Cola, Samsung, Brookstone, M&S, NEXT, Carrefour and BHS among its list of clients.

There are about 20 suppliers of digital radios in Hong Kong. Most have extensive experience manufacturing traditional FM radios. Though many suppliers of Internet radios have their own brands, OEM is the preferred arrangement for makers in the special administrative region. The interviewed suppliers eye customers who are interested in long-term partnerships and cooperation.

Sysbay has been a manufacturer of consumer electronic products since 1997. It carries out production at a factory in Dongguan, Guangdong province. The 120,000sqm facility with 1,500 employees can turn out 200,000 digital radios monthly.

A member of the Shun Tat Group, Sysbay is a 10-year veteran in rendering OEM services. It can provide product design and cost analysis to packaging design and marketing support. More than 20 R&D engineers work for the firm.

City Electronics owns an 18,580sqm production facility with 1,500 workers attending to its 32 production lines in Dongguan. It has more than 30 years’ experience in the design and manufacture of consumer electronic products backed by ISO 9001:2000 and ISO 14001:2004 certifications. The company can churn out 800 DAB and Internet radios every day, or more than 20,000 units per month.

In 2007, City Electronics shipped about 150,000 DAB radios and 50,000 HD Radio tuners. It projects a 20 percent shipment growth during 2008.

Qanstar’s factory in Huizhou, Guangdong, has 20 production lines manned by more than 1,500 workers. It can produce up to 20,000 Internet radios per month. Aside from Wi-Fi Internet radios, the company’s 20-man R&D department is also busy with product development for iPod docking stations and desktop MP3 players. The company releases a new model almost every month.

In Taiwan, DAB radios and Internet radios are considered two promising products in terms of market, supplier base and production. Currently, the major market focus is Europe. DAB standards have already been in existence in the region for years, but the market is still headed for a robust growth, thanks to increasing consumer awareness, reduced prices and new applications.

ASUSTek is a publicly listed IT company in Taiwan. Its headquarters in Taipei takes care of technical and server support for buyers from the Asia-Pacific region. ASUS Computer International is its technical, service and RMA support center in North America. The company also has technical support centers in Germany, Austria, the Netherlands and mainland China.

Goldteck’s factory is in Tainan, Taiwan. Its production capacity can reach 100,000 units per month. On average, the company produces 3,000 to 5,000 units of digital radios per month. With the launch of the MSU-2030, Goldteck projects a monthly production of 5,000 to 7,000 units. So far, the company has four in-house R&D engineers and cooperates with other R&D laboratories.

Deepsound is a privately owned company established in 2003. It is based in Taoyuan, Taiwan, but has a manufacturing site in Dongguan in Guangdong, mainland China. The company positions itself as an OEM/ODM service provider. Its ISO 9001-certified facilities churn out 50,000 units of radios every month with capacity not yet fully utilized.

Deepsound specializes in ODM design. It takes 45 days to develop a new model. It releases five or six new products annually. With a mainland China factory, Deepsound claims to offer goods with competitive prices.