Rockwell Collins' decision not to develop in-flight entertainment systems for the Airbus A380 and later the Boeing 787 took the manufacturer out of the twin-aisle market, and effectively reduced competition for new aircraft models to a Panasonic Avionics and Thales duopoly. But despite the fanfare surrounding Singapore Airlines' launch last week of a Panasonic eX2-equipped A380 and the recent spate of 787 customers that have signed for Thales' TopSeries platform, Rockwell feels it made the right move by bowing out.
Rockwell's principal manager cabin systems marketing, Matthias Walther, says that after looking at research and development costs and revenues generated by twin-aisle contracts in the past few years, the company determined at the end of last year that the "profitability of this market segment didn't justify its associated risks".
He points to the R&D that went into Thales and Panasonic's work on fitting wireless IFE technology to the 787 - a plan ultimately shelved by Boeing. "Those are the risks you have to take into consideration developing a new system. Rockwell Collins wasn't prepared to do that," says Walther, adding that the airline IFE market "is a boutique market without boutique prices".
Staying out of such high-profile programmes as the A380 and 787 upset some customers and required assurances, quickly given, that Rockwell would continue to support its current twin-aisle systems, which boast a significant installed base on major international operators, including American Airlines and Air France. Walther notes that Rockwell's legacy twin-aisle products are not static. British Airways, for example, has upgraded from analogue TES to digital dTES on its Boeing 747s, 767s and 777s.
That the manufacturer no longer actively competes with Thales and Panasonic in the twin-aisle sector, however, has perhaps been most evident by the absence of an eTES (enhanced total entertainment system) display at recent IFE exhibitions. Whether the move represents a failed twin-aisle strategy or a calculated exit from a low-yield market remains to be seen.
Rockwell had originally planned to participate in new twin-aisle business. From as early as 2001 discussions with Airbus centred on using Rockwell's eTES as the basis for its hardware for the A380, but with new file servers and seat boxes. Three years later, Rockwell confirmed that its own internal development schedule conflicted with "a very aggressive Airbus schedule for new IFE systems offerability".
For Thales, upgrading existing IFE for the latest-design widebodies was not an option. "Five to six years ago, all three companies were confronted with the same question: do you try to upgrade or do you start with a completely clean sheet of paper and design a new system?" says Thales Aerospace North America chief executive Brad Foreman. After careful analysis, he says, Thales determined that upgrading "would probably cost you as much as a whole new system, and at the end of the day you'd have a system that wasn't as competitive".
To Panasonic, Rockwell's decision "was a bit of a shock", but it has been "very good for ourselves and Thales", says Panasonic director of strategic product marketing David Bruner, noting that "we're both picking up pieces of their previous market share, and they were very big". Being able to attract previous Rockwell customers has also eased Panasonic's phase of investment in new projects. The company wants to be "the pre-eminent player, not just have the largest market share, but be the most profitable, and that means investment."
Even as start-up IFE firms look to enter the market, Panasonic and Thales' lead, for now, appears solid. "To play in this marketplace, you can't be a small company [because] you don't have the resources, the support network," and the "financial means" to make investment, says Foreman.
Meanwhile, IFE platforms for single-aisle aircraft, such as Rockwell's dPAVES system, remain a continued focus. Having invested substantial R&D to offer cutting-edge solutions for business aircraft operators, Rockwell is also "looking to see what could translate to the single-aisle", says Walther.
It expects to play a role in Boeing's long-awaited replacement for the 737, which could be brought to market in 2015.
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