Clarion Sees iPhone Controller As Path to Factory Radio Opportunity

Called Next Gate, the controller comes with a suction cup fixture that mounts to the windshield and a 30-pin iPhone connector. The device doesn’t require installation and offers a far more affordable navigation solution to consumers than the company’s $800 navigation system with AM/FM tuner and amplifiers that sells through specialty mobile electronics installers.

With Next Gate, Clarion has its sites on the broader market. The controller works with any car radio with a 3.5mm stereo jack for an auxiliary input. Of the 300 million vehicles on the road in the U.S., “probably 99 percent” of them don’t have factory systems that can control smartphone apps, Thomas told us. Clarion estimates that 20-30 million vehicles have front-panel or nearby jacks that could accept Next Wave’s connector. Many more could connect with an RCA adapter, he said.

Next Gate works with Clarion’s new cloud-based telematics service, Smart Access, that allows consumers to control their iPhone in a vehicle “in a safer way,” via touch screen and voice, Thomas said. The company will implement Smart Access technology “in many, many Clarion products to come,” Thomas said, along with Clarion OEM customers in factory telematics systems and for other “partner companies,” he said. Thomas wouldn’t estimate when the first factory radio might roll out with Smart Access from car makers, but Clarion President Paul Lachner told us at the Showstoppers event Monday evening that it wouldn’t be “before two years” due to the long design cycle of the automotive OEM market. Clarion hopes to sell “tens of thousands” of Next Gate systems by the end of the year, Thomas said.

Users will download the Smart Access app via the iTunes store, and the app will direct them to other apps that are compatible with the service, Thomas said. Initially 11 apps will be available, including TunedIn for Internet radio stations, Pandora, turn-by-turn navigation from InfoGation, real-time traffic from Inrix, apps for news and weather, and Vlingo, which enables speech-to-text functionality for Facebook and Twitter and other applications, Clarion said. Clarion also counts an iPod player and Bluetooth capability as apps. Future apps will make use of GPS for navigation and location-based services, he said. TunedIn and Pandora’s basic app are among the free services. Odyssey has yet to set its subscription price, Thomas said.

Next Gate is compatible with the iPhone 4S and 4. Clarion doesn’t currently have plans to support Android-based phones because of the wide variation in device configuration and Bluetooth implementation, Thomas said. But “there are ways to connect” in wired and wireless ways to Android devices, and that’s “something for us and other companies to consider,” he said. “It’s not our focus for the first generation but one never knows for the future,” he said.

Clarion “hopes to make money on the hardware,” Thomas said, and Smart Access apps could generate revenue in the future, he said. At launch, Smart Access will be a free service but “because we plan to expand in the future, I wouldn’t rule out any possibility of subscription,” he said. Pricing models will depend on the value offered and what “the market will bear.” There are also revenue-sharing opportunities with third-party app providers, depending on their business models, he said. Citing one-time, monthly and annual revenue models, he said, “there are a lot of different ways to share in the success with our partners."

Clarion is looking to its OEM segment -- the majority of its business -- to offer additional opportunities for Smart Access, Thomas said. “Once you have a tie in to the bus system, you have direct connection to the vehicle itself,” which enables vehicle management, custom relationship management with billing and services and diagnostics, he said. The company plans to offer over-the-air software upgrades in the future.

As factory radios have become more sophisticated, the aftermarket has struggled with how to deliver compelling reasons for consumers to upgrade a vehicle’s sound system. Next Gate offers that opportunity through the iPhone, Thomas noted. “A lot of customers like the sound of their current system,” he said. “We think there are tens of millions of people who won’t replace that radio, and that’s who this is for,” he said.

Clarion wants to expand the Internet radio offerings, navigation for additional applications and location-based services for restaurants or sport events, Thomas said, with location-based services becoming “very powerful” for the device in the future, Thomas said. “Once you have the connectivity through the phone, along with GPS, what you can do with it is limitless,” he said.

CTIA Wireless 2012 Show Notebook

SRS Labs introduced the next version of its iWow audio enhancement device at a ShowStoppers event late Monday on the eve of the CTIA show. Dubbed iWow-U, the device extends the audio technology originally designed for the iPod and iPhone to tablets and PCs, said spokesman Michael Farino. The device arrives in stores this week, he said, and is expected to carry a list price of $69 for the standard version and $79 for the model with five swappable faceplates in different colors. Street prices are expected to come in at $50 with extra faceplates, and $40 without, he said. The next-gen device, which connects between a mobile handset and headphones, is self-powered with an internal battery that’s rechargeable by USB and is said to boost bass and treble while improving clarity and detail, SRS said.

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Cricket is looking to skew more of its product line to smartphones over the rest of the year, when it plans to offer more processing power, more memory and bigger screens at competitive prices, product manager Kevin Foth told us at ShowStoppers. Next-gen Cricket smartphones, due out in the second half, are likely to start at $139, he said, $10 off their current entry point. The company is planning a 1 GHz smartphone with a 4-inch screen in the next few months, he said. Cricket will continue to offer feature phones in the $49-89 range, where prices are not expected to fall further, he said, but there’s room for price movement in the hot smartphone segment, he said. “Our goal is to drive the MSRP of smartphones down to a range our customers are comfortable with,” he said. Cricket also plans to have its first LTE phone later this year, he said.

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HzO demonstrated a proprietary coating at ShowStoppers designed to protect the circuitry and ports of a mobile handset from water, humidity and other liquids. Called WaterBlock, the “thin-film nano-coating” can be applied uniformly during the manufacturing process and guards against accidental exposure to moisture, a spokesman told us. Although company literature said the protective coating allows users to talk on the phone in the spa or listen to an iPod in a swimming pool, the spokesman said the coating isn’t designed to enable long-term immersion in water. The company demoed an iPhone that played after being fully submerged in water. HzO is targeting manufacturers of the “next generation of smartphones” along with medical and military applications, he said. HzO is showing the material at the Zagg booth, with Zagg’s line of mobile phone cases and accessories.

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Wilson Electronics will bow signal boosters for mobile devices operating on Verizon and AT&T 4G networks, the company said at ShowStoppers. The $129 boosters are said to improve data transfer speeds and battery life and to reduce dead zones and dropped connections caused by trees, building materials, weather and other interference, a spokesman told us. Handsets use inductive coupling with the boosters’ cradles, which can work with mobile handsets and MiFi devices, he said. The Verizon model is due in stores soon, and the AT&T model is due out in Q3, a spokesman told us. The models also boost 3G signals on all networks, the company said.