BMW offers HD radio as option across all models – Analysis

The trades will be full of this one on Monday.

BMW is the first automotive firm to offer a factory-installed digital HD Radio(TM) receiver as an option across its entire 2007 product line. HD will be available for an extra $500 [see this news release from iBiquity].

A few things to consider here:

First, it could certainly be argued that change comes in small steps. So I don’t want to diminish the importance of this decision. Obviously, BMW doesn’t need to offer HD as an option if they don’t want to.

That said, there are several things worrisome about this:

1. BMW is a luxury automaker, not a populist vehicle. Radio, meanwhile, is the ultimate populist medium. The helps to position HD radio as a “luxury” item rather than the shape of things to come. A “status” pitch will not make HD radios universal. It is, of course, worth noting that other automakers are at various stages in the HD radio rollout process. Still, timing is everything. The sooner the better.

2. The radio is an “option,” not “standard.” iPod jacks are increasingly standard issue (indeed, a jack is a lot less expensive to produce than a radio is). Satellite radio is increasingly announcing “standard” availability on a growing range of models. There is no middle ground here. “Option” means you don’t need it. “Standard” means you don’t need to think about it. “Option” is a lose for a medium with ubiquitous aspirations. Plain and simple. I have said it before and will keep doing so: HD radio must be free. And “free” means “standard.” Selling HD radios in volume is next to impossible as things stand right now.

3. The price point is absurd. Although not for the average BMW owner. But we can’t talk out of one side of our mouths about the presumed importance of a $100 price point while out of the other side we celebrate a solution that costs five times more than that.

Again, optional is better than nothing. And one automaker is better than none. We can certainly judge this as a fine first step.

But I am really getting tired of timeline comparisons between HD radio and FM radio. The reality is that HD radio has very little time to make its mark (as does satellite) because technology is moving forward at a breakneck pace. Even a casual browse of the news from this year’s Consumer Electronics Show will reveal a number of developments that have the potential to leapfrog HD radio in five years or less.

My advice: Hedge your bets. The tea leaves are not that hard to read.

If you bother.

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