Auto Applications Store is Coming
Upcoming SlideShare
Loading in...5
×
 

Auto Applications Store is Coming

on

  • 1,078 views

Autotechinsider LLC article

Autotechinsider LLC article

Statistics

Views

Total Views
1,078
Views on SlideShare
983
Embed Views
95

Actions

Likes
0
Downloads
17
Comments
0

3 Embeds 95

http://www.lmodules.com 92
http://www.linkedin.com 2
https://www.linkedin.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Auto Applications Store is Coming Auto Applications Store is Coming Document Transcript

    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010       “Hand-­held  Revolution”:  Smartphone  Connectivity  driving  New  App  Software   Today,  only  about  20%  of  the  population  has  powerful  phones.  Smartphone  owners  are   those  of  us  that  can  afford  monthly  data  plans  for  constant  Internet  connections  and  the   capability  to  download  applications  to  their  phone.1  These  are  the  people  who  are   participating  in  the  “hand-­‐held  revolution”  that  is  also  increasingly  capturing  the   imagination  of  the  driving  public.  As  an  owner  of  a  Droid2  on  a  Verizon  3G  data  plan,   getting  a  new  application  for  my  phone  creates  the  same  excitement  as  going  into  a  record   store  in  the  1960-­‐70’s  to  obtain  the  latest  new  release.  There  is  a  sense  of  excitement  and   discovery.  More  importantly  downloading  applications  is  easy,  quick  and  affordable,  that  is   once  you’ve  bought  into  the  expense  of  the  smart  phone  and  its  data  plan.  A  whole  new   world  has  opened  up  –  applications  to  inform  you  (e.g.  Fox  News  widget),  entertainment   you  (e.g.  YouTube),  provide  a  useful  tool  (e.  g.  Bubble/plumb  level)  and  delight  you  (e.g.   BumpTM  to  swap  content/info.).  Many  have  devices  such  as  the  Kindle  and  iPad  have  built   in  connectivity  -­‐  3G  cellular,  Wi-­‐Fi  and  ever  present  Bluetooth.       The  automotive  manufacturers,  notably  Ford  with  SYNC,  have  announced  the  launch  of   their  apps  store  with  Pandora  (Internet)  Radio,  Facebook  and  Twitter  as  the  cornerstone   apps.  A  key  infotainment  auto  supplier,  Continental,  has  embraced  the  Android  platform   and  is  presently  launching  AutolinqTM  as  their  approach  to  an  open  platform  to  develop  and   make  available  apps3.    We  are  to  expect  smart  phone  penetration  to  reach  about  40-­‐50%  in   2012,  which  will  drive  the  creation  of  automotive  focused  apps  stores.  Recognizing  this   growing  trend  several  questions  come  to  mind:   • Will  Auto  Application  Stores  (AAS)  emerge  as  important  revenue  and  customer   satisfaction  initiatives?  What  is  exactly  the  business  model?       • What  automotive  applications  will  emerge  and  how  will  they  be  developed?  What   will  be  the  partnership  model  between  the  vehicle  OEMs,  auto  elecs.  Suppliers  and   new  third  part  software  developers  from  the  Consumer  Electronics  (CE)   community.     • Will  applications  be  created  by  the  vehicle  manufacturers  or  third  parties  will  they   originate  from  a  thriving  developer  community??     • Will  Android  or  Apple  emerge  as  the  software  platform  or  will  a  new  automotive   software  platform  such  as  GENIVI4,  Microsoft  or  QNX  Car5  emerge.                                                                                                                             1    Altman  Vilandrie  data  www.altvil.com   2  A  recommended  site  for  Android  users,  www.droidforums.net/forum/   3  www.conti-­‐ online.com/generator/www/de/en/continental/automotive/themes/passenger_cars/interior/connectivity/ autolinq/pi_autolinq_en.html   4  www.genivi.org/   5  www.qnx.com/products/qnxcar/   Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   1    
    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010     Look  to  the  Apple  App  Store  for  Answers   Phone-­‐based  applications  have  been  with  us  for  several  years  now.  We  need  to  look  to   Apple  to  understand  and  see  how  the  automotive  application  store  might  evolve.  The  first   $500  iPhone  was  launched  in  June  2007  to  a  somewhat  skeptical  world.  Initial  only  a  few   select  applications,  about  eleven,  were  available  integrated  as  part  of  iPhone  software.   These  early  basic  apps  were  quickly  followed  in  a  few  months  by  an  application  store,  as   we  know  it  today.  The  rest  is  history!  Today,  applications  purchase  is  a  big  business:       • 30  new  applications  created  each  month,   • over  1  million  are  available  ,   • with  a  revenue  of  about  $200  million  a  month.       The  Apple  apps  store  has  set  the  tone  for  other  stores.  Most  Apple  apps  are  being  priced  at   less  than  a  dollar,  the  cost  range  being  $.99  to  $4.99.  Entertainment  apps  cost  more  and  the   most  popular.  According  to  Gravity  Tank,  users  spend  about  $60-­‐65  a  year.6  Recent   research  conducted  by  Autotechinsider  LLC  through  the  Linkedin  (www.linkedin.com)   polling  application  is  that  most  of  us  (over  138  responded)  want  free  apps  but  are  willing   to  consider  paying:     • 46%  of  respondents  ONLY  obtain  FREE  apps  for  their  smart  phone     • 15%  of  respondents  PURCHASE  apps,  the  vast  majority  paying  less  than  $5  per   month,  only  1%  willing  to  pay  more  than  $5.   • $18%  of  the  respondents  are  intrigued  by  the  concept  of  an  AUTOMOTVE  APPS   Store     The  Automotive  Application  Store  Business  Model(s)     A  key  question  is  how  will  the  AAS  work  exactly?  How  will  automotive  applications  be   encouraged,  submitted,  verified  and  lastly  how  will  payment  be  made?    There  is  a  balance   between  helping  developers  get  to  market  quickly  with  a  viable  revenue  stream  and  overall   customer  satisfaction.  Customers  obviously  prefer  that  applications  are  free.  Our  research   at  Autotechinsider.com  research  has  verified  that  most  smart  phone  user  are  paying  less   than  $5  month  for  applications  and  are  predominately  obtaining  free  applications,  but   considering  paying  for  premium  apps.       We  expect  that  the  two  business  models  to  emerge  will  be  supported  by  the  vehicle   manufacturers,  that  is  one  that  is  advertizing  or  marketing  based  and  the  other  largely  user   funded.  I  expect  the  initial  model  adopted  by  the  vehicle  manufacturers  will  be  marketing   based,  that  is  the  initial  focus  will  be  on  providing  an  applications  store  as  primarily  a  tool   to  increase  customer  satisfaction.  The  app  store  in  the  marketing  business  model  is  an   important  tool  to  improve  customer  satisfaction  amongst  the  growing  smart  phone   demographic  and  to  create  a  fast-­‐to-­‐market  environment  for  new  features.  As  Ford  SYNC   has  indicated  the  smart  phone  generation  is  exactly  the  new  customer  the  auto  OEM  wants   to  attract!  Potentially  AAS  sponsored  by  OEMs  will  have  the  additional  benefit  lower                                                                                                                     6  Gravity  Tank  is  an  innovation  consulting  company  www.gravitytank.com   Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   2    
    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010     software  development  costs.  Premium  applications  that  require  user  fees  will  follow,  most   likely  as  enhancements  to  basic  free  applications.  Applications  that  require  on-­‐going   subscription  costs  due  to  hosting  costs  are  a  possibility,  but  this  author  envisions  that  most   likely  these  applications  could  be  advertising  funded.  Ford  has  set  the  tone  by  providing   Traffic,  Directions  and  Information  (TDI)  for  the  first  three  years  with  out  a  monthly  fee.7       Even  though  Ford  has  teamed  with  MapQuest  and  Google  Inc.  to  bring  street  directions  and   other  information  to  SYNC  owners,  other  valuable  data  base,  such  as  weather  data  and   Points-­‐of-­‐Interest  data  for  niche  applications  -­‐    sight  seeing,  etc.  In  summary,  it  is  difficult   to  project  a  large  market  of  paying  customers  for  premium  apps.  As  several  people  who  we   surveyed  stated,  “my  requirements  are  largely  met  by  free  apps”.     What  Applications  will  we  find  on  the  Auto  App  Store?   A  key  questions  is  what  are  the  applications  that  most  interest  the  automotive  customer.  At   the  2009  Consumer  Electronics  Show  (CES),  Ford  announced  the  suite  of  new  off-­‐board   navigation  and  information  base  applications  working  through  a  voice  portal.  At  the  2010   CES,  the  concept  of  an  application  store  with  addition  Internet  radio  based  applications,   news  services,  Twitter  and  Facebook  were  added  -­‐  stream  Pandora  and  tweet  hands-­‐free.   More  importantly,  Ford  announced  support  for  third-­‐party  applications  and  will  provide  a   SDK  to  developer.  At  CES  there  was  a  line  of  potential  developers  at  the  Ford  both  in  North   Hall  asking  for  the  SDK.  8    As  we  detailed  in  our  2010  CES  Report  (see   www.autotechinsider.com  for  report  availability  and  pricing),  Ford  has  created  an   intriguing  new  developer  community  and  alliance.  The  engagement  with  the  University  of   Michigan,  as  led  by  Ford  Researchers  has  evaluated  the  100,000  or  so  iPhone  applications   to  determine  what  should  be  a  “short  list”  for  introduction  on  SYNC.  A  new  project  called   “American  Journey  2.0”  is  underway9.    As  expected  social  networking,  navigation  and   mobility  information  are  important  to  the  new  generation  of  highly  connected  drivers.    The   following  are  a  few  new  applications  being  considered.10                                                                                                                     7  http://media.ford.com/article_display.cfm?article_id=30444   8  http://articles.latimes.com/2010/jan/08/business/la-­‐fi-­‐ces-­‐ford8-­‐2010jan08     9  www.autoevolution.com/news/ford-­‐to-­‐upgrade-­‐sync-­‐with-­‐american-­‐journey-­‐20-­‐project-­‐12709.html,   http://media.ford.com/article_display.cfm?article_id=31285   10  www.gearlog.com/2009/12/ford_announces_app_store_for_s.php   Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   3    
    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010     What  are  the  new,  or  rather  not  yet  announced,  applications  that  we  should  expect  to  be   targeted  towards  the  automotive  customers.     • The  majority  of  applications  will  be  enhancements  to  existing  mobile  applications:   o created  for  the  smart  phone  by  the  consumer  electronics  development   community  that  are  “enhanced”  adapted  to  work  in  the  vehicle  in  a  safe  and   effective  manner,  i.e.  automotive  user  interface  creation.     o Ford  SYNC  in  providing  an  SDK  (API)  allows  developers  to  map  cell  phone   (buttons)  to  the  Ford  Instrument  panel  controls  (hard  buttons  and  voice   interface)   • Other  applications  will  be  cell  phone  based  portals,  using  voice  technology  as  a   significant  new  user  interface.  An  example  is  Aha  Radio.11     o 3G/4G  connectivity  enables  the  phone  to  become  a  useful  portal  with   powerful  search  capabilities  to:    home,  office  and  other  cars      Traffic,  weather  and  location  based  services     o a  remote  control  device  to  home,  office  and  vehicle  for  customization,   security,  energy  efficiency,  etc.    New  home  connectivity  standards  emerging    Machine-­‐to-­‐Machine  interfaces  (M2M),  new  applications  that  will  be   context  aware  and  able  to  configure  your  vehicle  and  home   accordingly   • More  entertainment  apps  -­  new  video  and  mobile  TV  applications  with  new  search   applications.  We  have  seen  at  CES  the  introduction  of  powerful  new  widgets  that   streamline  search  and  integrate  new  Internet  applications  with  video  (e.g.  my  sport   scores,  my  news,  etc.).  Companies  such  as  Gracenote  are  working  on  enabling  these   new  entertainment  apps  by  providing  technology  that  allows  powerful  search   capabilities.     The  Automotive  Apps  Store  Must  be  Better   The  AAS  will  be  different  than  smart  phone  focused  app  stores  –  more  robust  apps  and  a   focus  on  ease  of  use.  As  a  recent  CNET  article  indicates  we  should  remember  “the  next  time   your  PC  crashes,  consider  yourself  lucky  that  the  same  flaky  PC  operating  system  is  not   controlling  your  car.”12  For  example,  new  middleware  from  QNX,  called  QNX  car  and  the   GENIVI  Infotainment  referenced  platform  (www.genivi.org/)  based  on  Linux  were   designed  with  these  competing  and  challenging  objectives  in  mind.  Automotive   infotainment  needs  to  sync  with  the  clock  speed  of  the  PC  or  consumer  electronics  world–   the  ability  to  quickly  upgrade  and  experience  new  applications,  but  not  the  “flaky”  part.  The   vehicle’s  instrument  panel  and  infotainment  system  increasingly  have  more  and  more  in   common  with  a  PC  and  our  smart  phone,  the  ability  to  quickly  add  compelling  new                                                                                                                   11  www.ahamobile.com  see  www.youtube.com/watch?v=fOcf78Vd2TQ     12  http://news.cnet.com/8301-­‐13924_3-­‐1045)4331-­‐64.html   Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   4    
    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010   applications,  but  in  a  safe  and  non  distracting  manner.    I  would  suggest  that  the  majority  of   apps  will  reside  on  your  smart  phone,  but  that  there  will  be  several  auto  focused  apps  that   will  reside  solely  on  your  infotainment  system  that  takes  advantage  of  the  car’s  built-­‐in   user  interface.  QNX  articulates  this  vision  well.     In  conclusion,  what  is  in  it  for  the  vehicle  manufacturers  to  create  and  maintain  AAS?  We   doubt  it  is  the  revenue  stream  from  selling  applications  alone,  but  rather  a  marketing   business  model  targeted  at  improving  overall  customer  satisfaction.  In  contrast,  the  goals  of   Google  and  Apple  are  clear.  Google  wants  users  to  be  web  based  through  a  browser   connected  to  a  Google  server.  The  more  we  use  the  Web,  the  more  Google's  generates   revenue.  In  a  similar  manner,  Apple  wants  to  get  users  to  be  customers  of  iTunes  and  its   App  Store  that  requires  us  to  purchase  hardware  like  Macs,  iPhone  and  now  the  iPad.   Vehicle  manufactures  will  want  us  to  visit  their  apps  stores  for  reasons  more  similar  to   Apple.  We  will  be  more  likely  to  buy  the  vehicles  that  are  platforms  to  safely  and  quickly   obtain  compelling  new  apps.    Our  Linkedin  survey  provided  us  with  insights  into  the   concerns  and  questions  of  current  and  potential  auto  apps  store  users,  excerpts  modified  to   protect  the  responder’s  identity  are  listed  below:     “I  have  many  free  apps  now  and  used  to  it…I  MAY  pay  for  auto  apps  through  my   smart  phone..”  Note:  several  comments  about  “free  apps  only”     “I  would  like  to  just  walk  into  a  store  and  have  someone  just  show  me  how  these   applications  work…  I  learned  more  from  testing  the  product  “     “New  apps  are  researched  then  I  download  …”.     “The  cost  of  a  smart  phone  data  plan  for  my  family  approaches  a  car  payment”     “GPS  works  well,  but  I  would  like  to  have  elevation,  waypoints,  compass,  trails,   coastal  markers  in  addition  to  street  directions  and  maps”     “..  the  premium  apps  I’m  interested  are  around  LBS,  like  weather…  another  auto  app   is  to  allow  customization  of  my  vehicle  ,  such  as  displays  for  easier  use…”     “A  car  will  require  a  different  set  of  apps  that  are  safe  and  easy  to  use”     “  Auto  apps  need  to  be  non-­‐distracting,  since  auto  manufacturers  need  to  be   concerned  about  litigation.”       One  important  take  away  is  that  those  who  are  not  participating  in  this  important  new   convergence  of  consumer  electronics  technology  with  automotive  electronics  will  be  left   behind  –  to  participate  means  to  learn  and  guide  the  direction  of  the  business  model.  This   comment  applies  to  the  vehicle  manufacturers,  suppliers  and  consumers  –  join  the  “hand-­‐ held  revolution”!!   Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   5    
    • The  Auto  Application  Store  is  Coming  !!!   By  Dave  McNamara,  Autotechinsider.com   March  2010     About  Autotechinsider.com     “The  automobile  industry  is  profoundly  affected  by  adjacent  industries  that  produce  the   technologies  that  are  involved,  directly  or  indirectly,  in  the  production  of  a  vehicle.  Since  the   percentage  of  a  given  vehicle's  cost  related  to  elecs,  software,  networking  solutions,  and   related  services  continues  to  grow,  we  are  most  interested  in  these  technology  areas.    Based   own  our  extensive  experience  in  the  automotive  industry,  we  cover  major  events  and  produce   insightful  reports  on  the  technologies,  the  companies,  and  the  trends  that  we  believe  will  have   a  significant  impact  in  the  near  future”.     Disclaimers   All  information  gathering  was  done  in  compliance  with  the  ethical  standards  of  the  Society   of  Competitive  Intelligence  Professionals  and  within  the  provisions  of  the  US  Economic   Espionage  Act  of  1996.             Information  provided  is  for  internal  use  only  and  not  for  publication.  Autotechinsider  LLC   6