Connected Infotainment, Advanced Technologies, Apps Paying off for OEMs

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A couple of years ago no one would have figured out that the automotive industry will be discussing technologies like HTML 5, multi-touch gesture recognition, EyesFree and so on. But today the European and North American automotive markets are hinging on the very same technologies to yield them that competitive advantage and increase vehicle sales. Ford clearly proved with the SYNC and its app ready rollout that a tightly integrated, value added, non-distracting system with a wide content choice will surely help improve vehicle sales numbers and value. Several OEMs have followed suit and today only a very few are left who are still sorting out their connected strategy and in other words are losing a share of the pie.

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Connected Infotainment, Advanced Technologies, Apps Paying off for OEMs

  1. 1. September 2012 Connected Infotainment: Advanced Technologies, Apps Paying Off for OEMsPraveen Chandrasekar - Program Manager, Telematics & Infotainment “50 Years of Growth, Innovation & Leadership”
  2. 2. Connected Infotainment: Advanced Technologies, Apps Paying Off for OEMs Market InsightA couple of years ago no one would have figured out that the automotive industry will bediscussing technologies like HTML 5, multi-touch gesture recognition, EyesFree and so on. Buttoday the European and North American automotive markets are hinging on the very sametechnologies to yield them that competitive advantage and increase vehicle sales. Ford clearlyproved with the SYNC and its app ready rollout that a tightly integrated, value added, non-distracting system with a wide content choice will surely help improve vehicle sales numbersand value. Several OEMs have followed suit and today only a very few are left who are stillsorting out their connected strategy and in other words are losing a share of the pie.What to Offer – Getting Clearer and ClearerIt has become abundantly clear that the first step towards the connected infotainmentstrategy is to offer support for entertainment and social networking apps either from anembedded model or a tethered model with basic vehicle HMI support from the touchscreens, basic voice commands and steering wheel controls. The tethered model allowsdrivers to keep a single data and voice bill and not pay for another one inside the car thoughthe amount of data that the driver can burn remains a key challenge. But clearly all OEMs whohave either been leaders or fast followers in this space ranging from Ford, BMW, GM, Daimler,Toyota have all started with a portfolio or internet radio and social networking apps whichhas now evolved to more specific mobility and vehicle related offerings. This first space hasalso been the target of Tier 1 suppliers such as Harman which acquired Aha mobile tointegrate them into their low and high end offerings and also look at laggard OEMs to getthem to speed with the others.First Generation is Over – What Next?With the dust settling in terms of the first offerings many OEMs and the associatedecosystem partners have started discussing and formulating the next generation offerings.From a content and app perspective the evolution happening can be summarized as followsMobility related apps and content – examples being the Daimler Moovel which is anintegrated intermodal mobility related app and BMW’s initiative in San Francisco offering EVrelated car sharing and mobile parking apps. Clearly there is a shift towards more drivingrelated apps and this is also an area where OEMs have higher chances of monetizing appsrather than the first generation which was all about reusing popular third party content: - Brand-specific content – Ford is taking a bold step in partnering with healthcare companies and developing apps for diabetes patients and asthma patients. These are a clear effort in taking up health wellness as a competitive differentiating theme and build on the first mover advantage they already had. - Other interesting themes such as augmented reality, ADAS, V2V communication are also being explored from an app perspective by OEMs.© 2012 Frost & Sullivan Page 2
  3. 3. Connected Infotainment: Advanced Technologies, Apps Paying Off for OEMs Market InsightThe more interesting part of the evolution story are the elements happening around thedriver distraction minimization and taking the HMI to an all new level. One example of thiswhich was hyped quite a lot was Apple’s partnership with 9 OEMs during the recent WWDCevent. What can change the game very fast however, is if Apple were to come up with its ownMirrorLink-type solution and then offer to OEMs a very compelling package. Mass marketmanufacturers such as Chevrolet already announced Smartphone navigation apps for its smallcar models such as Spark and Sonic considering the price sensitivity of customers. If Applecan create its own Mirror Link and provide a cool interface to its navigation feature whichcan be controlled by SIRI, then we are definitely talking about a market revolution. And giventhe number of OEMs who have already partnered with Apple on the “Eyes Free” feature; it isclear that Apple ownership is very high amidst these car brand owners. Frost & Sullivanbelieves that the integration of SIRI at a phone level right now is purely a basic consumerappeasing strategy and for Apple to become a force to reckon with in this market, we are atleast one automotive product cycle away.Several OEMs like Cadillac on the CUE, Chrysler on the new Uconnect Access system bringin conversational speech assistant in the car. Nuance on the other hand is also bringing innew customers for it’s almost close to natural speech solution called Dragon Drive such asBMW and so on. So clearly there are major innovations and developments happening in theHMI space.Final Word – Need for Technologies like HTML 5Infotainment platforms, apps, basic content partnerships are all ready and set. But what’smissing are a typical app store type environment with developers having access to SDK’s andplatforms without having to go through direct OEM interactions, UI innovations which canallow OEMs to reuse the same app and infotainment platform in different models but stillmake it look and feel different using technologies like HTML 5 and a real future vision formaking money from content. The revenue opportunity truly lies in the wealth of vehicle datawhich OEMs are the only ones to have access to and depending on their comfort in openingthis up might open up a completely new service stream for them. Ford is again taking a leadin this in its newly opened Silicon Valley lab by offering developers read only access to thevehicle data and asking them to develop interesting apps. This is the key area along with safeUI and reusable platforms which will make this not only a cool to have thing but alsosomething that’s a constant business stream.© 2012 Frost & Sullivan Page 3
  4. 4. Connected Infotainment: Advanced Technologies, Apps Paying Off for OEMs Market InsightFrost & Sullivan is content partner to upcoming 2nd International sMove360° Conference forthe Connected Car, taking place on 23rd October in Munich, Germany.The automobile industry is undergoing a transformation: Intelligent vehicle communications,car-to-car or car-to-infrastructure communications technology and the connected car - allthese concepts describe a new era in the automotive industry. Further information on theconference, visit: www.smove360-conference.com About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break todays market participants. Our “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure. § The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation. § The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact Us: Start the discussion Join Us: Join our community Subscribe: Newsletter on "the next big thing." Register: Gain access to visionary innovation

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