By Richard Saintvilus – 06/15/12 – 8:05 AM EDT
NEW YORK (TheStreet) — For as much as I have pounded the pavement regarding the current state of the audio entertainment market, it seems that my arguments continue to fall on deaf ears. How’s that for irony?
The debate has become fierce and at times extremely vile among investors as it relates to the competition between the satellite delivery platform ofSirius XM(SIRI) vs. the likes of Pandora(P), Spotifyand even the BlackBerry Music Service fromResearch in Motion(RIMM) which are all on the IP standard. The question is which will survive and which will be killed off?
If Apple(AAPL) has its way, the answer might be both.
It doesn’t take a genius to see that the IP platform is dominant now. It currently connects every mobile device such as smartphones, tablets, video games systems and even your television. Yet it is only starting to grow, as every business is starting to shift to what will eventually be a “cloud-y” environment.
In particular, it appears the now-active fight for dashboard space is about to take a drastic turn, as Apple has climbed in the driver’s seat.
When discussing the future of mobile audio entertainment — particularly as it relates to the satellite delivery platform — it seems investors are always afraid of venturing into the possibility that cars can one day be WiFi enabled. Well, it’s no longer just a “venture” the technology is now here. So essentially, aside from tethering your smartphone to stream Pandora or iHeartRadio or even Sirius, vehicles are being manufactured with their own IP addresses already built in. Your car will soon be able to notify your dealer’s service department whenever a part needs replacement or is in need of a simple oil change.
I might one day receive a text message from my car telling me that the rear tire is under-inflated — this will become possible with the ever-expanding role of IP.
“So what?” you might say. But realize that, at some point, there will be expanding communication capabilities beyond just safety features — drivers will be able to communicate with their cars. The two companies best positioned to capitalize on what the automobile is about to become are Apple and, to a lesser extent, Time Warner(TWX).
A recent study conducted by KPMG revealed that 63% of automotive executives — including those atFord(F), GM(GM), Chrysler and several others — said they expect to see the automobile eventually being tied directly to the telecommunications industry. That will include mobile WiFi access, 4G capability as well as various speech recognition options such as Apple’s popular Siri — whether for search or instruction.
Furthermore, these same automobile leaders believe that computer-related services in the auto, including safety components, will become integrated with existing standard features like music, Internet and telecommunications to formulate the “smartcar” — all done with the requirement of an IP address.
So essentially, once the smartphone market gets saturated, there will be “smartcars” and “smart homes” to keep technology companies such as Apple in business for many years to come.
Another winner in the IP race will possibly be Time Warner — in my opinion, this is where investors need to start transferring their attention. Not only does Time Warner have a large library of content that includes music, movies, TV, etc., but it is also in the IP broadband delivery business — it will be able to offer mobile broadband, cable television and broadband radio to any IP device anytime and anywhere.
I think more than anything the 24/7 access will prove to be a key difference for a company like Time Warner. And of course it can offer such access while also saving customers money by bundling it all with your existing home Internet package and delivering it the automobile.
Bottom Line
With all of these possibilities around the corner, coupled with the fact that Verizon(VZ) recently announced plans to make data charges more affordable for family plans of more than one phone, it is hard to envision how Apple will not take over the entire car.
Not only has it started by becoming a navigator (of sorts) but it is also in the business of distributing content from its popular iTunes store and it offers users the ability to store all of their content on its cloud to make it easily transferable from any device.
This likely signals the end of any progress for the likes of Pandora and Sirius within the automobile as the evolution of technology is now slowly taking away all of the arguments that once made them both seem unbeatable.
This article is commentary by an independent contributor, separate from TheStreet’s regular news coverage.
D & B Auto Radio, Inc. 