The document discusses the evolution of telematics and internet connectivity in vehicles from 2000 to 2020. It describes how embedded cellular, driver phones, and cellular wi-fi routers will enable greater connectivity and new applications in areas like safety, infotainment, and remote diagnostics. The document also examines the growth of mobile app stores and their potential role in vehicles.

1. Egil Juliussen. Ph.D., Principal Analyst & Fellow, Automotive Business, iSuppli Corp. Consumer Telematics, Las Vegas, January 6, 2010 Telematics & Wireless Carriers Wireless Carrier Overview Communication Trends Telematics & Internet Android & iPhone Summary

2. OEM Embedded Telematics: USA Availability is Share of Auto Models Carrier perspectives: M2M connection with low ARPU

3. OEM Mobile Device Telematics: USA Availability is Share of Auto Models Carrier perspectives: Extra driver phone revenue; Data plan potential

4. USA Carrier Relations * Supplier is Autonet; Aftermarket Chrysler* Cadillac* VW* Aftermarket Cellular WiFi Router Verizon Sprint AT&T T-Mobile Jasper M2M Smart Phones BlackBerry Android WinMobile BlackBerry Palm Pre Android WinMobile iPhone BlackBerry Symbian WinMobile BlackBerry Android WinMobile n/a Connected PNDs Garmin 1690 Nuviphone TomTom Telematics GM OnStar M-B Toyota BMW

5. Carriers Own Brand: Off-board Navigation USA Verizon Wireless Sprint AT&T T-Mobile Alltel Wireless U.S. Cellular Navigation Brand VZ Navigator Sprint Navigation AT&T Navigator None Alltel Navigation Your Navigator Germany T-Mobile Vodafone e-plus+ O2 Navigation Brand Navigate Navigon Vodafone Navigator None None UK T-Mobile Orange Vodafone 3 UK O2 Navigation Brand None Orange Sat Nav Vodafone Sat Nav None None France SFR Orange Bouygues Telecom Navigation Brand SFR Navigator Orange Navigation Map and Go None Japan NTT DoCoMo KDDI au Softbank Willcom Navigation Brand I area Navitime Navitime EZ @ map Navitime Navitime

6. Carrier Auto Market Potential BFG=Before Free Google; AFG=After Free Google BFG: 40M+ AFG: 20M+ BFG: 8M+ AFG: 6.5M+ Subs: $10/month Pay-per-use: $1-2 Off-board Navigation 100M+ subs 50M+ users 10M+ subs 5M+ users Subs: $2-10/month Pay-per-use: $1-5 Other LBS Content Unknown 5-10% of total OEM: 6M+ subs AM: 8M+ subs 50M+ users 15M+ users 20M+ subscribers 1.5M+ subscribers 2016 Potential Business Model 2010 Potential Embedded Telematics New voice plan; subs New data plan; subs 6M+ subscribers Negligible Mobile Device Telematics Voice plan; more use Data plan; more use 15M+ users 1M+ users Cellular WiFi Router New data plan; subs OEM & Aftermarket OEM: 0.1M+ subs AM: 0.2M+ subs App Store: Auto Apps 1-time app sales Apps w/service sales Unknown 3-5% of total

7. Egil Juliussen. Ph.D., Principal Analyst & Fellow, Automotive Business, iSuppli Corp. Consumer Telematics, Las Vegas, January 6, 2010 Telematics & Wireless Carriers Wireless Carrier Overview Communication Trends Telematics & Internet Android & iPhone Summary

8. Connected Vehicle: What is Connected? Safety & Security eCall/ACN connection b-Call/road assistance link Safety & Security Car-to-car: driver assist systems Car-to-roadway: collision avoidance Connected Driver-Passengers Connected Vehicle Infotainment Related Voice communication link Information access connection Entertainment download link Mobile device connection Car Infotainment Systems Remote system control Map update connection Tracking information connection Stolen vehicle tracking connection Driving Related Route-destination download link Traffic information connection Mobile search connection Mobile navigation connection Electronic toll connection Road usage fee connection Core Auto Systems Remote diagnostics connection System problem reporting link ECU SW correction connection ECU SW function update link State mandate compliance link OEM/Dealer/CRM link

9. What Are the Connection Technologies? Tech Systems/Apps Other Information Embedded Cellular Core auto systems ECU management Safety and security GM OnStar, BMW Assist approach Remote diagnostics is a hit Remote SW management is next Driver ’ s Mobile Phone Infotainment focus Some safety & security Limited ECU apps Fiat Blue&Me, Ford Sync approach Driver ’ s mobile phone plan Adding services: Japan, Sync, Blue&Me Cellular to Embedded Wi-Fi Router Mobile devices in car Infotainment Rear-seat apps Router for many devices Link to home LAN, access points Future WiMax candidate DSRC or IEEE 802.11p WAVE V2X applications Driver assist Safety & security Infotainment Real-time: Response in milliseconds V2X and ADAS integration Most/key apps require DSRC Mandate required; ROI: not if, but when

10. Connected Vehicle Technology Evolution 2000 2010 2020 Safety & Security Cable or Cradle DSRC- 802.11p Embedded Cellular Driver Phone ECU SW Management Remote Diagnostics Service Portfolio Bluetooth HFI Driver Centric V2V-V2I Apps V2V Apps Real-time Data Core auto Centric Service Portfolio Cellular to Wi-Fi Router AM, OEM Product Service Portfolio Infotainment Centric ECU SW Mgmt?

11. Connected Infotainment Applications -- Telematics connection needed Cached Internet radio Live Internet radio Video content Feasible 2014+ Requires broadband Remote H-U Content Internet radio & video Internet games & social nets Rear-seat entertainment Cellular-WiFi router Passenger Content Current Features Emerging/Future Features Head-Unit Satellite radio Mobile music interfaces Mobile TV receiver Digital radio Music downloads Video & TV downloads Navigation Traffic & weather Destination download Probe car data Off-board navigation Mobile search Traffic camera video Eco-navigation Remote map update Incremental map update LBS functions Telematics Services Vehicle home page Concierge services Infotainment App Store Internet apps & services

12. Connected Auto System Applications AM=Aftermarket -- Telematics connection needed Road event warnings Collision warning Collision avoidance Eco applications V2V & V2I Current Feature Emerging/Future Features Core Auto ECUs Remote diagnostics Remote operation AM: OBDII to iPhone Software corrections Smartphone remote operation Software upgrades Functional upgrades Infotainment ECUs Remote diagnostics Software corrections Smartphone remote operation Software upgrades Functional upgrades ADAS Driver assist functions Collision warning Collision avoidance V2I & V2V integration apps

13. V2V and V2I Applications V2I Applications Intersection safety Turning safety Merging safety Eco/fuel-saving apps Infotainment Link Information to driver Info to passengers Info to mobile devices Telematics applications V2V2I: Communication links for many applications & services V2V Applications Emergency warnings Enhanced driver assist Collision avoidance New driver assist apps V2V2I Broadband com link IEEE 802.11p; DSRC IEEE 1609 WAVE SAE J735 Messages Other com links Transport Efficiency Traffic management ETC & other payments Traffic info flow: 2-way

14. V2X Perspectives Many safety applications If so when and how much? Capability of integrated systems Overlapping applications Will V2X & ADAS compete? Or augment each other? V2X versus ADAS Project collision potential For all nearby cars Warn driver if needed Speed & direction Precise location Car weight & type Heartbeat Message WiFi router price: <$100 Low-cost AM device likely But expensive RSE Manufacturing cost: <$100 When volume production Much lower cost than ADAS V2X Hardware Cost 5.9 GHz or 5.8 GHz No time for PC-like network Broadcast by each car 10x/sec Dedicated frequency spectrum Ad-hoc network architecture “ Heartbeat” message is key Key Technologies Comments Key Information

15. V2X Summary Metcalfe’s law : The value of a communications network is proportional to square of the number of users Aftermarket: 30%-33% Aftermarket: 31%-34% Aftermarket: 32%-35% Aftermarket: 28%-32% Japan: 28M-32M units USA: 85M-95M units W. Europe: 80M-90M units Worldwide: 250M-300M units 2015-2025 V2V Sales Rapid deployment is best Follows Metcalfe’s law AM incentives recommended Mandate needed Benefits have network effect Aftermarket sales is important V2 Deployment Accident avoidance to eco apps Safety applications first Who will do V2I applications? With good network coverage Many applications OEMs to focus on V2V apps V2I application come later Infotainment apps even later V2X Applications Tremendous long-term benefits Society ROI is very good Not an if, but a when question Infrastructure investment is high V2X Future Comments Key Information

16. Egil Juliussen. Ph.D., Principal Analyst & Fellow, Automotive Business, iSuppli Corp. Consumer Telematics, Las Vegas, January 6, 2010 Telematics & Wireless Carriers Wireless Carrier Overview Communication Trends Telematics & Internet Android & iPhone Summary

17. Telematics vs. Internet Connected Cars Music downloads Internet radio Video downloads (passenger only) Traffic camera video downloads Safety applications Remote diagnostics Navigation services Mobile search Typical Applications BMW Assist (Germany only) HFI & Smartphone w/data plan Chrysler Uconnect Web-WiFi router GM OnStar (Embedded) Ford Sync (Mobile phone) Fiat Blue&Me (Mobile phone) Typical Systems Telematics-Connected Internet-Connected Communication Links Embedded cellular Mobile device HFI Embedded & mobile device HFI Embedded cellular & data plan Mobile device HFI & data plan Embedded cellular to WiFi router Key Characteristics In-band modem (voice plan) No data plans-yet Low bandwidth apps Data plan required Broadband communication Mostly high bandwidth apps 2009 Market Size-USA Embedded sales: 2.6M Mobile device HFI sales: 5M Telematics service users: 6M Embedded Internet users: none Mobile device car users: 0.48M WiFi router car users: 40K 2016 Market Potential-USA Embedded sales: 10M Mobile device HFI sales: 12M Telematics service users: 20M Embedded Internet users: 1.7M Mobile device car users: 19M WiFi router car users: 7M

18. Internet in the Car Definition Internet in the car is a very fluid concept Many Internet-based applications are already used in cars or content are delivered to car systems via Internet infrastructure, but are not classified as Internet usage Email, RSS, instant messaging and mobile search Traffic information, destination download & off-board navigation To access Internet content, application and services will require a communication link with a data plan Hence iSuppli’s definition of Internet in the Car is as follows: Any communication link with a data plan that is connected to a car system is an Internet-enabled or Internet connected car There are currently 3 communication links that qualify: Embedded telematics links (only BMW in Germany qualifies) Mobile device telematics link (growing Smartphone data plans) Cellular to WiFi router (all have data plan)

19. Internet & Telematics Connection Overlaps Internet Connected Cars Internet Devices Used in Cars Telematics Connected Cars Embedded Mobile device Voice Plan & In-band Modem PCs & Netbooks Mobile Internet Devices Portable Media Players Portable Games Others Data Plan Note: The Internet-connected car circle is currently very small

20. USA Telematics versus Car Internet Users

21. Telematics Evolution 2005 2010 2015 Embedded TM 2.5G & IBM Services Embedded & BT 2.5G-3G; IBM Smartphone Bandwidth TM=Telematics; IBM=In-Band Modem; BT=Bluetooth; WAVE=Wireless Access in Vehicular Environment Mobile Device 2.5G-3G; HFI Mobile Device 3G; Smartphone IBM; Services Cellular-Router 3G & Data Plan Embedded & BT IBM; Data Plan 3G; Smartphone Mobile Device 3G; Data Plan Smartphone Embedded & BT Data Plan; 3.5G-4G; Smartphone Mobile Device Data Plan; 3.5G- 4G; Smartphone Cellular-Router 3.5G-4G; Data Plan V2V & V2I; DSRC; WAVE

22. Egil Juliussen. Ph.D., Principal Analyst & Fellow, Automotive Business, iSuppli Corp. Consumer Telematics, Las Vegas, January 6, 2010 Telematics & Wireless Carriers Wireless Carrier Overview Communication Trends Telematics & Internet Android & iPhone Summary

23. iPhone: The New LBS Battleground Category Suppliers Comments Maps Maps Icon (Apple) Mapquest Google Map Server—how long? Top Mapping application On-Board Navigation TomTom: $100; $70-promo Magellan: $100; $80-promo Navigon: $90 $70-promo NavNGo iGO: $80 NDrive: $30 intro ALK CoPilot: $40; $20 intro Sygic: $40-USA XRoad G-Map: $50 Apple’s blessing; NA & EU NA, Navteq, Pedestrian mode NA, EU NA USA; Also other Smartphones Inrix traffic info NA, EU, & Asian coverage N. America Off-Board Navigation AT&T Navigator: $120/Yr Mapquest: $30/Yr Networks In Motion: $40/Yr MotionX-GPS: $25/Yr Telenav; $10/mo NA; Telmap; $4/mo; $10/3-mos NA; $5/mo NA; $3/mo Traffic Information Inrix (free app) Traffic.com Pro Via onboard/off-board apps Probe data source; very popular Ad-free: $3/mo Life-time price: $25 range LBS Applications Hundreds of companies Thousands of apps 11%+ of total apps More than 3,000 LBS apps

24. Android: The Next LBS Battleground? Google PR exceeds carriers’ PR Leading edge, shows potential Primarily as Android PR High-end Smartphone Google Nexus One Motorola Droid set standard Data plan roaming fees in EU Operators set price Operators set price Android 2.0: Free in USA Free in other regions? Telmap Navigator Telenav Off-Board Navigation Category Key Information Comments Maps Google Map Server Now uses it own maps On-Board Navigation Many already available ALK CoPilot: $40; $20 intro Intrinsyc Destinator: $70 Navigon NavNGo iGO: $80 Similar pricing to iPhone $40-$80 NA NA, Navteq map EU NA & EU; $120-Pan-EU LBS Applications Hundreds of companies Thousands of apps 10%+ of total apps More than 1,600 LBS apps Future LBS, Navigation Free off-board navi impact? Impact on other LBS? Will navi apps keep up? It will stunt Android navi market But how much? iPhone: More navi innovation?

25. What Is the App Store Concept for Cars? 100K+ applications available 18K+ applications available Apple iPhone App Store Android Market Place Smartphone Examples H-U, navigation, telematics Current systems are low volume Others: Win Auto, QNX, Android Primarily for infotainment Need high volume SW platforms Opportunity for Genivi standard Auto App Stores Continental has an App Store BMW has an App Store Many iPhone auto apps available Tier 1-3 suppliers Auto manufacturers Smartphone apps for auto Auto Apps Sources Smartphone auto apps first Genivi is best positioned Telematics needed for download Important by 2015 or sooner Standard-based H-U to lead Telematics apps to be important Auto Apps Future Works best for standard platforms Easy to understand, find, use, buy SW firm gets 60-80% of revenue Internet-based application store Must have easy user interface Mostly from 3 rd party SW firms What Is An App Store? Comments Key Information

26. Egil Juliussen. Ph.D., Principal Analyst & Fellow, Automotive Business, iSuppli Corp. Consumer Telematics, Las Vegas, January 6, 2010 Telematics & Wireless Carriers Wireless Carrier Overview Communication Trends Telematics & Internet Android & iPhone Summary

27. Connected Vehicle Deployment 2000 2010 2020 Selective Prevalent V2V & V2I Embedded Cellular Selective Prevalent Standard Selective Prevalent Standard Driver Phone HFI Selective Selective Standard Selective Standard Selective Prevalent Selective Prevalent Selective Prevalent Selective Prevalent Selective Prevalent Standard Selective Prevalent Standard Cellular to WiFi Router China W. Europe USA US WE Cn US WE Cn US WE Cn US WE Cn

28. Auto Driving Forces: Telematics Solutions ECU Telematics Environmental Issues Mandate driven Higher fuel economy Lower emissions Less road congestion Remote Control Telematics Driving Forces Issues Accident Avoidance and/or Mitigation Mandates emerging Connected World & Car Customer pull V2X=Vehicle-to-Vehicle & Vehicle-to-Infrastructure; EV=Electric Vehicle; ECU=Electronic Control Unit Driver distraction Driver warnings Driver error fixes Apps & Services More distraction Usage restrictions Telematics Solutions Eco Telematics Safety Telematics EV Telematics V2X Telematics HFI Apps Telematics LBS/Navi Telematics “ Cloud” Telematics Internet Telematics

29. Telematics Feature Evolution 2010 2015 2020 ACN 2.5G Remote Diagnostics Off-Board H-U Radio Destination Download Safety & Security Voice & HFI TM Navi & LBS TM Cloud TM Internet TM ECU TM Traffic Info/Probe Voice HFI Off-board Navi SW Error Updates SW Feature Updates EV TM TSP Remote Control Remote Control Smartphone & PC RC More RC Functions Driver-selected SW Updates Advanced ACN Voice-based SMS Mobile Search Bluetooth Link EV Monitoring Collision Warning V2X TM Collision Avoidance Music Download Off-Board H-U Content Map-POI Updates Incremental Map Update EV Grid Apps-Service Video Download Driver EV Apps Vehicle Slowdown Apps Stores MP3 HFI Autonomous Driving Automated Navi Update More Safety Features More Services

30. Telematics Summary 2005 2010 2015 Embedded Telematics 2.5G Link Voice & IBM Safety Apps Low BW Apps TM=Telematics; IBM=In-Band Modem; BW=Bandwidth; WAVE=Wireless Access in Vehicular Environment Mobile Device Telematics Driver Phone Bluetooth HFI Phone apps Cellular WiFi Router Bluetooth HFI 2 Wireless Links Navi Apps Safety Apps 3G Phone; IBM TM Services High BW Apps Some Data Plan Data Plan via Driver Phone 3G-3.5G Other Data Plan? 3.5G- 4G Data Plan Smartphone Services & Apps 3-3.5G Link Data Plan Infotainment V2V & V2I; DSRC; WAVE Telematics Evolution: Single  Multiple Links Voice/In-Band Modem  Data Plan Low  High Bandwidth Apps 3.5G-4G Telematics Integrated?

31. LBS Summary Perspectives Challenging business models Entrenched players Distribution channel uncertainties Decade of rapid growth Established segments Emerging segments LBS Opportunity Many untested/unknown apps Metadata ownership, privacy issues Difficult to monetize (except search) 2005: Negligible 2010: 14M 2015: 100M+ LBS Centric Users USA Location info to be a commodity Most LBS info has short-time value Roaming prices issues in some areas 2005: 6.1M 2010: 83M 2015: 215M LBS-Enabled Devices In-use USA Many established players Ad-based impact likely; Android first Customer may need data plan 2005: 0.3M 2010: 17M 2015: 80M Navi Centric Service Users USA Many different HW/SW platforms Some HW/SW platforms to disappear Only iPhone is easy to reach 2005: 2.8M 2010: 30M 2015: 85M LBS-Enabled Device Sales USA The Bad News The Good News