iPod getting plugged in with automakers

Lisa Napoli Aug 3, 2006

KAI RYSSDAL: Apple Computer’s on the hot seat today. It has nothing at all to do with temperature. Over in France, what’s being called the iPod law went into effect. Regulators are now free to force the company to make iPods and the iTunes music store compatible with other kinds of digital music players. Sweden and the UK are going after Apple as well. But a couple of big companies gave Apple a boost today. Marketplace’s Lisa Napoli explains.


LISA NAPOLI: And you thought a factory-installed CD player was spiffy. GM, Ford and Mazda are banking you’ll pay a few hundred dollars more to make it easy to listen to your iPod in your car.

They all said today they’ll offer ways to hook up your iPod directly into the stereo system as an option in new models. GM’s Nancy Philippart says her company’s just responding to customer demand.

NANCY PHILIPPART: We need to make our vehicles just as easy and compatible as what people might be doing in their own homes.

BMW, Honda, and Daimler Chrysler are a few of the automakers who already offered the option with some of their models. Apple says this means 70 percent of all 2007 car models will be iPod compatible.

Paul Resnikoff of Digital Music News says since the controller doesn’t work with any other players, it could kill competition and make the iPod even more popular:

PAUL RESNIKOFF: It’s just another example of the dominance, especially in the US.

On the car side of the deal, this could make GM and Ford more competitive. Steve Miller of Brandweek says younger car buyers — the most likely to tote iPods — don’t usually gravitate to those automakers now:

STEVE MILLER: If they’re cool enough to do that, some buyers are gonna say: “Hey, maybe I can play my iPod on that? Maybe I’ll take a look at them.

Already there’s evidence that people don’t like to be in the car without their iPods. A new Harris Interactive poll shows half of drivers who use clunky adapters to play them in the car now would choose the factory-installed option the next time they buy a vehicle.

In Los Angeles, I’m Lisa Napoli for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.