The consumer electronics world is defined by companies which have ecosystems and those which don't. The haves, like Google and Apple, lead the world in value, revenue and profitability. The have nots like Samsung and Yahoo struggle to achieve valuations, revenues and profits that match the competition. As cars become connected, ecosystems will play just as important a role in defining the winners and losers of the connected car market is they have done in the mobile phone market. This presentation presents analysis and insights into the role that ecosystems will plan in defining success within the connected car market.

1. 2016 Is The Year Of The
Automotive Ecosystem
Presented at CES
January 2016

2. OEMs Can Master Their Own Destiny
Executive Summary
1. By 2020 OEMs who have successfully mastered ecosytems will lead in
profitability and market share.
2. The best way to get to an ecosystem is by partnering with suppliers.
3. CloudMade understands ecosystems and helps guide you through the
ecosystem puzzle.
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3. Engineering & Design Team:
Kyiv R&D: Munich Design Studio: CloudMade Fleet:
Management Team Past Successes:
Here To Serve You
Taras Bublyk
Product Management
James Brown
CTO
Nick Black
CPO
Pavel Stelmakh
Program Management
Juha Christensen
Chairman & CEO
Jean-Marc Matteini
Product Planning

4. Piecing Together The Puzzle
4
Design
Professional Services
Development
Systems Integration
CloudMade Learning
Solutions
Partner Ecosystem

5. What’s An Ecosystem And
Why Does It Matter?

6. 2001 20072006 2010 20132012 2014
2015
Ecosystems Define Success
iCloud
Music
Apps
Storage
User Profile
Billing
iOS + Mac OS

7. Through Ecosystems OEMs Get
77
Retain
Customers
Higher
Sales
Better
Margins
Boost Sales, Retention & Profitability

8. Connected Car Forecast:
Sunny With Storms On The
Horizon

9. 9
Connected Promise Yet To Be Realized

10. Software Is Eating The World
10
2000
FEATUREPHONES RULE
Functionality a bare minimum of what
users require to make calls and send
messages
Market controlled by:
Over 80% market share controlled by
Nokia, Ericsson, Motorola & Matsushita
Nokia market cap $229B
Apple market cap $83B
2010-2015
SMARTPHONES REDEFINE INDUSTRY
Functionality is driven by rich eco system
from which users can find apps that solve
their needs and wants
Market controlled by:
Apple and Google (90%+ of market share)
Nokia market cap $15B (before sale)
Apple market cap $600Bn
2016 – Connected
Cars
Functionality a bare minimum of what
users require to drive from A to B and
connect with the Internet to find POIs
Market controlled by:
Toyota, General Motors, Volkswagen,
Renault-Nissan, Ford, Fiat-Chrysler,
Daimler etc.
Toyota market cap $220B
Self Learning Car Leader:
Market does not exist
2018 – Self Learning Cars
Functionality driven by cars that learn and anticipate
consumers’ behavior and provide functionality
accordingly
Market controlled by:
The OEM market will experience significant market share shifts between
2015 and 2018
Toyota market cap in 2018 ??
Self Learning Car Leader:
To be determined

11. New Competitors At The Door
11
Competitor Strategy Impact For OEMs
Use data to offer
world’s best ad
product
• Reduces OEM differentiation
• Erodes OEM margins and flattens market share
Car sharing, fractional
ownership, new OEMs
???
• Reduce OEM differentiation
• Threaten to change fundamental business models
of the industry
Design and sell world’s
most desirable
consumer electronics
• Exceptionally tough competition at high end
• Threaten to change fundamental business models
of the industry
Own the worlds on-
demand transportation
network
• Lessens the need to own, lease or rent vehicles
• Reduces OEM pricing power
Compete with Uber via
partnerships
• Lessens the need to own, lease or rent vehicles
• Reduces OEM pricing power

12. The Business Case
for Ecosystems

13. Through Ecosystems OEMs Get
1313
Retain
Customers
Higher
Sales
Better
Margins
• Build lifelong relationships
with customers via the
cloud.
• Delight drivers with
stunning user experiences.
• Offer vehicles with
uniquely differentiated
features that attract broad
customer demographics.
• Lay the groundwork to
build future additional
revenue streams.
• Improve pricing power by
increasing differentiation
vs other OEM brands.
• Leverage mass
customization to build
more experiences from
fewer platforms.
Boost Sales, Retention & Profitability

14. Ecosystems Lead To Success
14
Revenue and Net Margin are Q3 2015. Market cap as of 22nd Dec.
The Failed To Builds The Want-To-Haves
• Facebook, Xiaomi, Microsoft,
Alibaba and others are investing
billions of dollars to create their own
ecosystems.
The Haves
Apple
$51.5Bn revenue
21.5% net margin
$602Bn mar cap
Google
$18.7Bn revenue
21.3% net margin
$514Bn mar cap
The Have-Nots
Samsung
Electronics
$44.0Bn revenue
10.6% net margin
$150bn mar cap
Yahoo!
$1.2Bn revenue
6.2% net margin
$31Bn mar cap
Nokia
$229Bn mar cap 2000
ê
$15Bn mar cap 2014
Blackberry
$220Bn mar cap 2000
ê
$9Bn mar cap 2016

15. 15
Google Yahoo!
• $3.50
$2.63bn in revenues from 749m Android users1
• $0.42
$252m revenue from 600m mobile users1
Google Takes 9x More ARPU
Average
Revenue
Per User
1 - http://www.radiofreemobile.com/yahoo-out-of-options/ & Radio Free Mobile “Mobile Ecosystems – Gated communities”
• 63%
The percentage of Digital Life services such as messaging,
social networking, games, e-commerce, etc.
Digital Life
Coverage
• 73%
Yahoo! lead in this metric largely due to their recent
acquisition spree of various mobile properties.
• Users are heavily engaged
How many of the ecosystems services do users use, for how
frequently and for how long?
Engage-
ment
• Users are lightly engaged
Yahoo!’s ecosystem does not entice users to do much more
than check mail, read a blog post or read a news article.
Conclusion Google wins the ecosystem battle hands down against Yahoo!

16. 16
Four Ecosystem Pillars
Digital Life
Coverage
• Services like music, social media, local
search that are relevant to the driver and
their journey.
Compatible
Business
Model
• One or more business models that are
driven by the ecosystem.
Rewards
Users For
Loyalty
• User experiences that leverage data,
analytics and frequent updates to
continuously win, re-win and reward users.
Data
Sharing
Between
Domains
• Interconnections between different parts
of the ecosystem that lead to fun, easy to
use experiences.
Google
STRONG
STRONG
VERY
STRONG
VERY
STRONG
OEMs Today
LOW
MEDIUM
VERY LOW
LOW
Key ingredients for a healthy ecosystem are:

17. Case Study: What Happens
When Google Enters The
Market

18. From Good To Bad To Ugly To Commodity
18
July 2012January 2012 May 2013
January 2014July 2013 Oct 2014

19. Hardware Differentiation Isn’t Enough
19
• Apple is the only OEM to have successfully adopted a vertically integrated strategy of owning key ecosystem
components. Microsoft and Blackberry have failed with similar strategies.
• Samsung is the only Android OEM to share industry profits. Their huge scale (108M units in Q3 2015, 23%
market share, 3.2x more units than the Huawei, the no. 2 Android OEM) and their semiconductor business are
the key to their success.
• Huawei, Lenovo, LG, HTC and others all loose money in their mobile phone businesses.
As Google enters the automotive as they did the phone industry, why would we expect the outcome to be
any different to that shown here?
Apple
Samsung
Blackberry
Nokia / Microso8
HTC LG Sony Ericson
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015E
Smartphone industry share of EBIT margin since 2007 for top 8 smartphone vendors

20. 20
Path A: Take Google’s
or Apple’s Ecosystem
Path B: Do It Yourself
Short Term Impacts
• Offer a weak, nascent
ecosystem to customers.
• Hugely increase R&D costs.
• Spend 2-5 years building and
assembling ecosystem.
Medium to Long Term:
• Opportunity to differentiate is
balanced by the cost and
complexity of maintaining and
developing a full stack
automotive ecosystem.
• Swelling R&D costs cut into
margins, impacting
performance.
OEM
Short Term Impacts
• Get access to a buoyant
Android ecosystem.
• Reduce R&D costs.
• Get customers hooked on
Google.
Medium to Long Term:
• Become 1 of 20 OEMs with the
same Google Car OS.
• Reduced differentiation leads
to falling sales and margins.
• Reduction in R&D spending
further reduces innovation and
differentiation.
Path C: Partner With
Suppliers
Short Term Impacts
• Plug in various ecosystem
components to start quickly.
• Maintain & focus R&D costs.
• Get customers hooked on
OEM’s own products.
Medium to Long Term:
• Become an OEM with a
uniquely differentiated product.
• Improve sales and margins via
improved pricing power.
• Own the customer profile,
leading to hugely improved
customer retention.
Three Paths To Choose

21. The Connected Cars gives
OEMs the opportunity to
build lifelong relationships
with the their customers.

22. Learning To Drive

25. Buying Family Car

26. Upgrading to Sports Car
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27. 27
Max, 87 years

28. Build Your Connected Car
Solutions With CloudMade

29. 29
Organizations Let Ecosystems Blossom
Ecosystem Organization
Product Planning
User Experience Design
Engineering
Partner Management
CloudMade’s role is to work with you to identify which of these capabilities you have and
which you need, then to work with you to source and integrate them.
Product Management
Requirements
Management
Strategic Planning
Software Platform
Development
Software Application
Development
Quality Assurance
Program Management
Project Management
Data Security and Privacy
Data Science

30. Build With CloudMade
Navigation
Offer in-car navigation experiences that are
superior to smartphone competitors by offering
drivers predicted destinations and journeys, a
choice of personal routes like safest, least stressful
and access to rich content like parking and POIs.
Production
Entertainment
Design
Offer in-car entertainment experiences that learn
the preferences and habits of the driver and their
passengers to make selection of entertainment
easier, less distracting and more personal for the
driver and their passengers.
Communication
Design
Connect drivers and passengers with their friends
and families in a safe and engaging way. Features
like predictive call list make phone use in the car
safer, Dayogram lets drivers share their journeys
with their social networks.
Coach & Performance
POC
Offer drivers applications that help them master
their driving skills, become better, safer or more
confident drivers. All drivers - from novices, to
parents with teen driver to performance
enthusiasts can benefit.
Personal Assistant
POC
Use powerful machine learning techniques to
offer a broad range of "personal assistant"
features to drivers and passengers that help busy
drivers stay productive, arrive on time and stay
safe, happy and healthy through their driving
lifetimes.
Remote Analytics
Production
The only automotive specific analytics solution that
lets OEMs and Tier 1s extract CAN data from their
vehicles into a server side big data environment,
allowing for over the air updates to specific signal
collection and collection rules.
CRM
Design
A range of features that help OEMs and Dealers
sell more cars and improve customer loyalty,
ranging from predictive maintenance to customer
car, warranty optimization and management.
Ads and Offers
Design
Lets OEMs deploy in-car advertising experiences
that monetize the connected car and open the
door for new business models. Leverages the
driver and passenger profiles to build a detailed
understanding of habits, likes and dislikes.
Map Feature Extraction
POC
Turns the car and the fleet into probes that can
create map layers such as pot holes, road surface
conditions, dangerous and stressful spots and
more, allowing OEMs to offer uniquely
differentiated map layers to their drivers.
Adaptive UI
Production
Gives the car the ability to anticipate the needs of
the driver, letting the UI offer functionality to the
driver and passengers as needed based on their
profiles, their past behavior and the context of the
drive.
Fleet
POC
Gives OEMs a range of well differentiated services
to offer to fleet customers like rental car
companies and large, medium or small
enterprises.
Mobility Services
POC
A range of compelling mobility services targeted at
drivers, passengers, public transport users,
traditional fleets (e.g. hire cars), new fleets (e.g.
on-demand taxies) that put the OEM in control of
the future of mobility.
Global Content
Production
Global content like POIs, weather data, gas prices,
etc. from well local brands that drivers love is
made available to OEMs and Tier 1s to integrate
into their search and infotainment products.
This set of 15 solutions is
offered to OEMs and combines
CloudMade’s software solutions
with partners to deliver the self-
learning car.
EVs
Design
EV drivers demand specialist features to help them
get the most out of their cars and help to reduce
range anxiety. A range of features like EV route
planning, up to date EV charging station maps and
EV focused drive coaching apps help EV drivers.
Comfort & Assistance
POC
Offer comfort and assistance features like cabin
pre-conditioning, personalized heating and cooling,
assisted onboarding of ADAS features like ACC,
learning cabin settings like seating and mirror
positions.

31. Master Your Destiny
Executive Summary
• Ecosystems can be key ingredients to high margin businesses.
• The connected car presents OEMs the opportunity to assemble ecosystems
that will contribute to their business success now and protect their businesses
in the future.
• Of the three ways to get an ecosystem, partnering with suppliers offers the
best prospects of short and long term success.
• CloudMade offers the parts of the puzzle in the form of analysis, strategy
consulting, design and development, partner relations and a range of software
solutions that turn the connected car into the self learning car.
• We’re ready to work with you to build out your ecosystem in 2016.
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32. www.cloudmade.com