Inflight entertainment hardware expenditure will rise to $2 billion in 2015 and the number of aircraft equipped with passenger connectivity systems will double to over 4,000 at the start of 2016, respected industry consultancy IMDC predicts in its latest market outlook report.
This explosive growth in IFE hardware is largely driven by increasing numbers of deliveries of twin-aisle aircraft, which have a near 100% penetration for IFE systems.
“Increasing numbers of deliveries of new aircraft naturally creates increasing demand for inflight technologies to be installed on these aircraft,” says IMDC in its full report, which has been obtained by the APEX editor’s blog.
Additionally, passenger connectivity systems that are available as linefit options “attract orders for that reason as airlines find the decision to include connectivity on a new aircraft easier than adding it to an existing one”.
These trends are occurring despite the fact that some airlines are looking at retrofitting wireless IFE solutions to their aircraft. Wireless IFE requires no hardware at the seat, and relies instead on either passengers’ own devices to display content delivered from a central server over a wireless onboard network or airline-provided portables. Such systems could prove particularly popular for narrowbody aircraft, as well as for aircraft that are dedicated to operating within a certain region. For instance, Qantas recently announced it will fit Panasonic Avionics’ eXW wireless IFE solution to its fleet domestic Boeing 767s.
“Since the days of portable DVD players, passenger devices have been viewed as a threat to IFE that will eventually render it unnecessary. Now, with passengers more likely to be carrying smart phones and tablets, passenger devices are viewed as a potential part of the IFE supply chain. This is an interesting development where IFE and passenger devices should now be seen as complementary, with the possibility to engage with passengers more than ever before,” says IMDC.
Wireless IFE has some limitations, with content provision a key issue, according to the consultancy. “Delivering IFE to passenger devices puts the inflight content supply chain in direct competition with delivery channels on the ground where iTunes, Amazon, and Google are competing aggressively,” says the report’s principal author, Robert Smith. He also outlines current content market challenges in the following slide.
Nonetheless, the advent of wireless IFE will have the notable impact of “lowering the price point for IFE hardware”. IMDC notes that many new entrants in the embedded IFE space have taken the view that AVOD IFE is more efficiently enabled by utilizing a seat-centric architecture. “Put simply, all processing and storage takes place at every seat, rather than being streamed to each seat from a central server. Instinctively, the duplication of hardware in this new approach might seem to be more costly but such systems typically make good use of advances in consumer-based technology where the costs savings over customer-built hardware justify the duplication.”
As a consequence, embedded IFE will diverge into two distinct paths – low-cost AVOD (which is more likely to be seat centric) and full functioned connected AVOD offering live Internet, TV content and passenger device integration, according to IMDC. “The end result of IFE hardware becoming both cheaper, lighter and possibly not required is that it becomes more feasible for airlines to introduce an AVOD inflight entertainment experience into aircraft where previously the costs of ownership would be considered prohibitive. For an airline though, IFE strategy is about much more than the hardware onboard; after all, how many passengers were ever entertained by a blank screen, no matter how high its resolution? Airlines also have to address the issues of the content available through their hardware and, recently, whether and how connectivity will be part of the passenger experience.”
IMDC points out that while passenger connectivity roll-out has not kept up with initial expectations, it has a high long-term potential. It says that suppliers offering international service “and increased bandwidth to aircraft” are likely to benefit most from future installations. “The benefits of passenger connectivity provision will remain limited if usage remains low but integration with IFE hardware increases the potential audience while innovative use of portals and applications has a real potential to offer an enhanced experience at reduced data-rates whilst providing a more subtle source of revenue,” says Smith.
IMDC warns, however, that if the current aircraft order backlog is delivered at the rate scheduled, there is the potential for a bottleneck in aircraft interiors, a topic regularly highlighted by this blog. “Particularly relevant to inflight technologies are constraints at seat manufacturers. Integration of new IFE systems into the seat represents a big achievement for the suppliers involved as seat and IFE suppliers have long struggled to coordinate their production schedules to meet airline expectations. Regardless, if there is a production constraint with seat manufacturers then delivery schedules of new aircraft to be installed with new inflight technologies could be challenges.”