Car FM transmitters

	The BTFM-05 car MP3 player from Shenzhen Solocar of mainland China has a built-in FM transmitter and Bluetooth handsfree function.

North America and Europe remain lucrative markets, especially for both high-end and FM transmitter-based models.

The maturity of the car MP3 player line now enables almost any manufacturer with experience in electronic digital device manufacturing capable of entering the industry. In mainland China and Taiwan, for example, makers who offer car MP3 players are also producing popular standalone car FM transmitters.

Most makers from both regions are OEM and ODM companies that depend on exports to drive production. The majority of exported car MP3 players still go to North America and Europe, but makers are already establishing themselves in emerging markets in Asia such as Japan and mainland China.

With developments in the US, makers face uncertainties in the world economy. Not counting the cutthroat price competition within the industry, makers of car MP3 players must also deal with competition with other in-car electronic entertainment products that have MP3 playback capability or built-in FM transmitter function.

IPR challenges are also still hounding MP3 player makers, especially on the mainland where lack of information on patents in designs and components is widespread. To address the problem, makers are quoting prices that exclude IP fees.

Despite this, the car MP3 player industry in mainland China was relatively stable in H1 2008 and is projected to experience a 10 to 15 percent increase in production in H2 2008—a projection that makers hope will carry through to the next six to 12 months. The exception in this forecast, however, will be the entry-level segment, where price competition is most intense.

There are close to 100 car MP3 player makers on the mainland that provide OEM services. More than half of the makers have a maximum monthly capacity of about 100,000 car MP3 players and FM transmitters.

Guangdong province on the mainland, specifically Shenzhen city, is the major sourcing hub for car MP3 players. The province is host to component suppliers and companies that offer services—such as third-party design, PCB assembly and mold injection—that are critical production stages for the electronics industry.

In Taiwan, there are at least 30 car MP3 player makers coming from different branches of the electronics industry, such as GPS navigation and computers products. Models from the island can be categorized into high-end multifunction and FM transmitter-based units.

	The FM transmitterbased car MP3 player from Taiwan's JumpRoo is equipped with two USB ports and one SD card slot.

North America and Europe remain the major markets for mainland China makers, especially for tier-one manufacturers. Suppliers with the capability to produce at least 100,000 units monthly and perform all production stages in-house are considered tier-one companies. These include Yifang Digital Technology Co. Ltd and Shenzhen Solocar Enterprises Co. Ltd. Small and mid-scale makers usually source key components and solutions from third-party suppliers. Some outsource all production processes except for the final assembly.

Yifang Digital, which has a longstanding experience in flash MP3 player production, has an average monthly output of 100,000 car MP3 players out of a monthly capacity of 400,000 units. Car MP3 players with built-in FM transmitters comprise 20 to 30 percent of its output, and standalone FM transmitters account forthe rest. Yifang Digital performs all stages of the production process in-house. Its products are compliant with the RoHS directive and have CE and FCC approvals.

Yifang Digital exports 80 percent of its car MP3 players and FM transmitters to the US. Most of its exports are accounted for by its OEM/ODM business. One of its clients is Belkin.

Shenzhen Solocar is a car electronic products manufacturer. Car MP3 players and standalone FM transmitters comprise about 90 percent of its total output. Most of its car MP3 players have built-in FM transmitters. Shenzhen Solocar has the capability to produce 200,000 units each month. Except for mold making, the company conducts all production processes in-house. It exports to various destinations, including Europe, North America and the Middle East. Its products are RoHS-compliant and have CE and FCC approvals.

Since 2005, Netac Technology Co. Ltd has been offering car MP3 players that require no installation. Most of the players have full-band FM transmitters and one-press connection feature. These can also be used as portable MP3 players. Netac has a monthly production capacity of 50,000 units. Netac mainly exports to North America and Europe. It also distributes its products in Asia, such as in Japan, South Korea and mainland China.

Most car MP3 player makers in Taiwan are export-oriented, usually engaged in ODM, OEM and even OBM businesses.

Ai Tek Inc. is an ODM/OEM company that has production facilities in Taiwan and Suzhou in mainland China with a combined area of about 41,700sqm. Ai Tek conducts full-line QA/QC procedures, including IPQC for materials and components, PQC during production and OQC for output inspection.

Ai Tek forecasts that its average monthly output in H1 2009 will not change from its H1 2008 figure of 3,000 units. The company has its own R&D team with an annual allocation of 5 percent of annual sales. Ai Tek’s main export markets are Japan, the US and Europe. The company has begun venturing to emerging markets, such as South America, Russia, India and the Middle East.

Geescom Electronics Corp. is an ODM/OBM company with the capability to conduct R&D and on-the-spot tests for its car MP3 players in-house. About 80 percent of its car MP3 players are shipped overseas, mainly Japan. Geescom’s plans for 2009 include breaking into the North America and Australia markets.

JumpRoo International Co. Ltd is a car MP3 player supplier mainly engaged in the ODM business. The company began to ship car MP3 players in Q3 2008 but is already eyeing a 15 to 20 percent growth in its production in 2009. Its overseas markets include the US, Europe and Australia.

E.Star Co. Ltd is mainly an OEM/ODM manufacturer. It exports all its car MP3 players to Central and South America, the US and Europe.