Value for a Connected Vehicle (IoT)
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The document discusses trends in the automotive industry and opportunities for connected vehicles. It outlines various value propositions for connected vehicle technologies for different customer segments including owners, businesses, dealerships, governments, and OEMs. It also examines the path from advanced driver assistance systems to fully autonomous vehicles and questions around standards, security, and business models in partnering to develop connected vehicle solutions.
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Value for a Connected Vehicle (IoT)
- 1. On the Value of Connected Vehicles Brian Loomis, Enterprise Architect
- 2. Automotive industry trends • China stable but not high growth (US market growing in short-term) • Russia and some emerging markets not growth areas • Urbanization driving smaller vehicle size, lower lifetime mileage (or longer lifespan) • Very congested cities’ programs to trial smart highways, tolls – Lyon down 20%, Beijing traffic alternating days • Cars are parked 94.8% of the time, new DL’s down 10% in 20 yrs. (WSJ, 21 Jan 16) • Reduced emissions primarily through hybrid, EV, fuel cell or other powertrain improvements – CAFÉ to 40.5MPG (even given lower fuel pricing in short term) • Lighter materials like aluminum and carbon fiber • Connected vehicle already here for some segments including infotainment, ADAS • Shared rides reducing overall fleet in suburban areas • McKinsey predicts 2% growth in fleet through 2030 • Multiple analysts predict 80% of cars are not needed • Autonomous driving critical by some date – safety and security differentiate • Can this reduce the 2MM fatal and injury crashes in US each year? • Personalization of vehicles increasing (>50% new models with voice activation today), privacy concerns, electronic component lifecycle << automotive components • Warranty and liability increasing • Regulation for E-911, emissions caps (diesel anyone?)
- 3. 1 2 34
- 4. Value propositions Do you want Cortana in your car? Owner • TDI, infotainment (news, audiobooks) with BT connectivity, traditional radio, speakers, SiriusXM • ADAS: collision avoidance; sense where you are going (ML, MirrorLink) • Navigation improvements (traffic, weather, InRix) • Camera (rear-view, also forward for MyTrip, surround view); radar-guided cruise • Driver assistance apps in vehicle (search, Pandora, etc., voice- activated, phone integration) • HEV charging/scheduled charge; vehicle efficiency (CO2/trip) and “green” analysis; biofuel usage; “green” routing • Message center (read my texts, calendar); voicemail follows me • Driver proximity (seat settings, heat adjustment, key-fob replacement for remote start) • Augmented reality, automatic parallel parking, stability & braking control, lane keeping Business Passenger • Autonomous driving • Join work/home network; social or team collaboration (driving awards) • Coordination with other products/services (not just auto) • Phone integration with vehicle (integrated address book, scheduling) • Wireless charging for peripherals Dealership / service center • Predictive maintenance/ servicing/recalls (CRM) • Dealership preference/integration, knows who you are as you drive up Government • E-911 / eCall / GLONASS • V2V – unfunded mandate across jurisdictions and OEMs • LoJack/car immobilization • Accident trend identification (NHTSA) • Behavior-based insurance rating • Police interceptor camera, police (laptop/phone as 2nd screen, or integrated) • Specialty truck (fire, tow, lifeguard, powerline, dump) • Catering truck inventory / third-party logistics (FedEx) • Fleet maintenance (government, farm, construction); integrated customer billing • Integrated logistics (with supply chain), traffic in- plant • Large truck efficiency (loading, mileage) • Geo-fencing and fleet policy (map constraints, valet mode, speed limit) • Rented/shared vehicle (taxi, Uber, urban mobility) • Performance data recorder (muscle cars) • Personal dashboard • FitBit-to-vehicle; imaging Project Mobii • Apps like GasBuddy • My Trip – post to Facebook? OEM • Brand elevation • Predictive maintenance for R&D • Warranty reduction
- 5. Value propositions per architecture patternTelematicsIn-vehicle (autonomous) Vehiclemesh Owner / operator • TDI, infotainment; driver assistance apps in vehicle (search, Pandora, etc., voice-activated, phone integration) • Performance data recorder • ADAS: collision avoidance; sense where you are going, radar- guided cruise, nav improvements • Augmented reality, automatic parking, stability & braking control, lane keeping • Autonomous driving • Driver proximity (key-fob replacement for remote start) • HEV charging/scheduled charge; vehicle efficiency (CO2/trip) and “green” analysis; biofuel usage; “green” routing • Coordination with other products/services (FitBit, home network), personal dashboard; social or team collaboration (driving awards) Business • Police interceptor • Specialty truck (fire, tow, lifeguard, powerline, dump) • Catering truck inventory / third-party logistics (FedEx) • Fleet maintenance; Large truck efficiency (loading, mileage) • Geo-fencing and fleet policy (map constraints, valet mode, speed limit) • Rented/shared vehicle (taxi, Uber, urban mobility) • integrated customer billing • Integrated logistics (with supply chain), traffic in-plant Dealership • Predictive maintenance/ servicing/recalls (CRM) • Dealership preference/integration, knows who you are as you drive up Government • Accident trend identification (NHTSA) • Behavior-based insurance rating • E-911 / eCall / GLONASS • LoJack/car immobilization • V2V – unfunded mandate across jurisdictions and OEMs • V2I
- 6. Each OEM is at a different point on the track OEM
- 7. Competitive analysis • GM – “build it myself” • OnStar services include voice, ads into car • LTE by AT&T • Chevrolet AppShop (J2EE stack) includes vehicle health app • RemoteLink phone app for remote start • Cadillac CUE • Planned V2V collision, wireless charging • Low monetization, high cost • Mercedes, BMW– “Innovate on apps” • BMW: Nippon Seiki HUD • BMW i8 SurroundView • Mercedes – CarPlay (Volvo, Honda as well) • Toyota/Lexus – Destination Assist • 12.3” display plus HUD • Disconnected collision sensing • Remote start via Azure • Voice activation • Backup camera • Rear entertainment system • Wireless charging • Bing, audible.com • Tesla – “vertical integration” of UX, Halo • Driver settings/profile • Chrysler Uconnect • Rear-seat infotainment • Wireless charging of devices, phone pairing • Touchscreen display • Vehicle as hotspot (Mopar) • Qoros, Volvo – “partner/acquire”
- 8. Path from ADAS to autonomous • Simplest, cheapest, most extensible model is IoT / Connected Vehicle • OTA updates do not solve the hardware obsolescence problem; car is not a disposable device like a phone b/c it is so expensive • Cheapest to layer on services like Uber and ridesharing • Long-term we know we need compute in vehicle, but the business model not settled • How will Google bring autonomous to market? Will Tesla, will an older OEM? (First Mover Advantage) • Regulatory, but also production capability… (can GM face the Inventor’s Dilemma?) • How close is autopilot/lane detection to real autonomy? • How do we do OTA updates for all these CPU’s? How do we upgrade the stack after the first N years? • Embedded protocols can be made resilient, but can they be made secure (see Chrysler Jeep takeover) • V2X requires standards and government investment/incentives “My 2005 Lexus has a tape deck, modified with a jack to accept phone speaker output, no microphone (or HUD for that matter), and my power jack is a lighter.” Brian Loomis
- 9. Path from ADAS to autonomous • Simplest, cheapest, most extensible model is IoT / Connected Vehicle • OTA updates do not solve the hardware obsolescence problem; car is not a disposable device like a phone b/c it is so expensive • Cheapest to layer on services like Uber and ridesharing • Long-term we know we need compute in vehicle, but the business model not settled • How will Google bring autonomous to market? Will Tesla, will an older OEM? (First Mover Advantage) • Regulatory, but also production capability… (can GM face the Inventor’s Dilemma?) • How close is autopilot/lane detection to real autonomy? • How do we do OTA updates for all these CPU’s? How do we upgrade the stack after the first N years? • Embedded protocols can be made resilient, but can they be made secure (see Chrysler Jeep takeover) • V2X requires standards and government investment/incentives
- 10. Customer segments define addressable market The journey to a mass market involves either extending an existing market for new feature (e.g., using phone in vehicle for TDI), cannibalizing an existing market (red ocean, above), or creating a new market (blue ocean). The latter is not defined in terms of a feature set or core value proposition but might offer a first mover advantage. For the red ocean strategy, approximately 90MM light vehicles (cars) were produced WW last year. Typical customer segments might include: • Owner • Operator/driver – child of parent (young driver), business employee • Shared operator – often a personal vehicle, too • Dealer/service operation • Insurer • Government (city, state/local) • (other OEMs or partners)
- 11. Segmentation by likely customer, matters • Luxury in US is about 750K vehicles out of 5.3M (14%), high margin for discretionary features • Hybrid/EV/hydrogen less than 3% of all vehicles, often tax subsidies; fuel economy features • Ridesharing* (new segment) • Drives down overall fleet size – • Special-purpose vehicles (work usage) • Autonomous (either POV or business) • Unlicensed at this point • Undefined segments – V2V and V2I
- 12. Revenue streams • Manufacturing the product (vehicle) has margins < 10% • Raw materials costs • High legacy labor rates (even with automation) • Capital-intensive plants (leading to high debt and high days of unsold inventory/carrying costs) • R&D not very focused on breakthroughs… low market win rate • Tiered sales structure (generally low dealership profit margin) • Lifetime value of customer measured in terms of initial transaction plus maintenance/parts; $480K for family of 4 • Regulatory restrictions increasing (warranty, country subsidies, lemon laws, E911, safety testing, insurance), license to sell and are barriers to entry for some feature sets Bootstrapping is critical: Value to owner = value received minus cost • Subscriptions historically have not generated broad replacement revenue • Need to identify segment early which will pay for the solution development • Some solution providers will reduce price to near zero as free parking
- 13. Channels • OEM sale – big scale, big investment • Transactional – capability built into car, warranty but no upgrades, Connected is “free parking” • Minor subscription channel – OnStar, USB or dealership upgrades typically, $120 USD/year for insurance policy services • Traditional aftermarket – low scale, medium investment • Subscription – hardware fixed, software OTA • Non-subscription (transactional) – DIY market • Technology sale – transfer pricing, small investment • Can blend with traditional aftermarket – needs network connectivity, access point to vehicle (CAN), usually subscription • Can be telco (M2M), hi-tech (Google) Could be free parking for something else like ads, app builders, etc. Not all channels are accessible by all interested parties – OEM’s, suppliers, tech companies
- 14. Business model questions (partnering) • What is the core competency of automotive manufacturing OEM’s -- integrators or just assemblers? How does this reinforce brand recognition/ add to conquest customers? Do I just buy a startup? • OEM has pricing power, do they have ability to execute? I can’t be the hardware maker for Google (who would get the relationship value)! What is the new moat? • How do I scale connected up to a bigger fleet than traditional segments? Tesla is eating my luxury segment! • What about warranty and proactive service notifications? Should the dealership pay for some of this? • My main value is performance data & brand, not an incremental subscription – can I sell the data and maintain privacy? Automotive OEM • What do Lyft/Uber look like as service partners to OEMs? Do I have to buy vehicles to get placement? • What if my service becomes commoditized like infotainment? Or swappable aftermarket with a cell phone? • Can I stay in business long enough to be a good partner? • Do we have to mandate standards for V2V/V2I? Is this like CAN standardization? Or objective criteria like rollover testing? • How do we invest in this, if it truly is a benefit to society – safety, congestion/health, etc.? • Could an automotive supplier provide a single unit that works for all OEMs – is this the only way for V2V/V2I/V2X to work? How to get around transfer pricing? • How can we keep the fixed hardware stack useful when product it is embedded in lasts much longer? Do we have to have a model that spans initial sale plus aftermarket upgrades? • Can we switch business model to subscription for effectively a capital purchase? Will the owner pay for this, or do we need funding from elsewhere in the business model? Automotive supplier State / local governmentHi-tech provider
- 15. Business model questions (partnering) • What is the core competency of automotive manufacturing OEM’s -- integrators or just assemblers? How does this reinforce brand recognition/ add to conquest customers? Do I just buy a startup? • OEM has pricing power, do they have ability to execute? I can’t be the hardware maker for Google (who would get the relationship value)! What is the new moat? • How do I scale connected up to a bigger fleet than traditional segments? Tesla is eating my luxury segment! • What about warranty and proactive service notifications? Should the dealership pay for some of this? • My main value is performance data & brand, not an incremental subscription – can I sell the data and maintain privacy? Automotive OEM • What do Lyft/Uber look like as service partners to OEMs? Do I have to buy vehicles to get placement? • What if my service becomes commoditized like infotainment? Or swappable aftermarket with a cell phone? • Can I stay in business long enough to be a good partner? • Do we have to mandate standards for V2V/V2I? Is this like CAN standardization? Or objective criteria like rollover testing? • How do we invest in this, if it truly is a benefit to society – safety, congestion/health, etc.? • Could an automotive supplier provide a single unit that works for all OEMs – is this the only way for V2V/V2I/V2X to work? How to get around transfer pricing? • How can we keep the fixed hardware stack useful when product it is embedded in lasts much longer? Do we have to have a model that spans initial sale plus aftermarket upgrades? • Can we switch business model to subscription for effectively a capital purchase? Will the owner pay for this, or do we need funding from elsewhere in the business model? Automotive supplier State / local governmentHi-tech provider “Everybody is going to come up with their own solution. Everybody will have their own software. And capital will continue to be wasted.” Marchionne (NAIS 2016) "What is important for us is that the brain of the car, the operating system, is not iOS or Android or someone else but it’s our brain,” Dieter Zetsche, the chief executive of Daimler, the maker of Mercedes vehicles, told reporters at the car show. IOS is Apple’s operating system for mobile devices. "We do not plan to become the Foxconn of Apple,” Mr. Zetsche said, referring to the Chinese company that manufactures iPhones.“
- 16. Information Exchange Patterns (partial) Telemetry Information flowing from a device to other systems for conveying status of device and environment Inquiries Requests from devices looking to gather required information or asking to initiate activities Commands Commands from other systems to a device or a group of devices to perform specific activities Notifications Information flowing from other systems to a device (-group) for conveying status changes in the rest of the world http://blogs.msdn.com/b/clemensv/archive/2014/02/10/service-assisted-communication-for-connected-devices.aspx
- 17. Feature sets determine the architecture Model 1 IoT message passing Infotainment Telematics Police/fire/delivery Insurance
- 18. Feature sets determine the architecture Model 1 IoT message passing Model 2 In-vehicle (real-time, feedback) ADAS Autonomous driving Car immobilization Geo-fencing Infotainment Telematics Police/fire/delivery Insurance
- 19. Feature sets determine the architecture Model 1 IoT message passing Model 2 In-vehicle (real-time, feedback) Shared ride V2X E-911 Tolls Coordination beyond auto Model 3 Coordinated transport (V2X, reliable message-passing) ADAS Autonomous driving Car immobilization Geo-fencing Infotainment Telematics Police/fire/delivery Insurance
- 20. Azure Connected Vehicle architecture
- 21. Azure Connected Vehicle architecture Simple-sounding features like OTA updates depend on hundreds of variables – like SCCM, but vehicle configuration BOM-based; do we test hacks/injection attacks? What happens if vehicle is not patched for a while?
- 22. Azure Connected Vehicle architecture Simple-sounding features like OTA updates depend on hundreds of variables – like SCCM, but vehicle configuration BOM-based; do we test hacks/injection attacks? What happens if vehicle is not patched for a while? OBD II connection to CAN bus allows BYO phone to bypass the need for a 3G/4G modem in-vehicle – allows new players to enter aftermarket.
- 23. AWS Connected Vehicle architecture (equivalent)
- 28. Non-functional requirements matter • Performance SLA • Protocol choice (AMQP, NNTP, MQTT, etc.) • Message throughput • Traceability / debug • Safety • Few standards exist in connected vehicle • Security (and legal T&C) • Reliability (redundancy, ulti-path), Availability, Recoverability • Data privacy and integrity • Manageability for global systems • Cost & billing • Liability – a new “–ility” 2/22/2016 30
- 29. Key takeaways 1. Value depends on where you sit; different systems within connected vehicle initiatives will move at different rates 2. Connected vehicle value propositions are still looking for a viable business model, even obvious ones like predictive maintenance 3. Three main architecture “patterns” fall out of these value propositions with very different costs, schedules, and technical requirements 4. OEM strategy is often a follower model with limited risk exposure through an active experiments program
- 31. About the speaker Brian is an IT enterprise architect and owner of LCG, a niche consulting firm specializing in advising customers on solutions to critical business-technology challenges. Personally, he provides leadership and hands-on consulting experience to a wide variety of customers in multiple industry segments, centered around understanding business value in the context of organizational goals, building team-centric organizations, and aligning innovative technology to business problems. He directly advises CIO's, CFO's and senior IT staff at both Fortune 50 and startup organizations with the belief that data-driven analysis and a well-prepared team can achieve high-value transformations through software strategies. He has held management and individual contributor positions in software design, program management, architecture (EA, SA and BA), test & operations, as well as marketing & new opportunity development. Brian presents regularly within the architecture communities of CEB and IASA, and at industry conferences such as Hannover Messe, ACM SuperComputing and International Telemetry. His industry specialties comprise global manufacturing (chemicals, oil & gas, automotive/discrete, and high-tech), state government, higher education, and healthcare. Brian has advised customers including: Dow Chemical, JD Edwards / Oracle, Delphi, Ford, Amway, Blue Cross, Intel, GM, Volvo, BASF, AstraZeneca, State of Colorado, Qwest, CH2MHILL, Quantum, Lyondell-Basell, DSM, TeamShare, Hilton, Kaiser and multiple universities. His interests include business alignment of IT, IoT, business process integration via the cloud, Industry 4.0, mergers/acquisition execution, collaboration, and software development processes. Prior to joining Microsoft, Brian served as an officer in the United States Air Force and holds a Master’s degree in Computer Science and a Bachelor’s degree from Princeton University.
- 32. References Business analysis • Crash statistics - http://asirt.org/initiatives/informing- road-users/road-safety-facts/road- crash-statistics & http://www.nhtsa.gov/NCSA • Market segmentation – AutoWeek, McKinsey Automotive • Research and governmental – CAR, Michigan Smart Corridor, NHTSA, • Universities – Stanford, V-REP, Audi Driving Cup, MIT, MITRI/MCity Suppliers & vendors • OEMs – Tesla, GM (OnStar), Ford (with GetAround, AppLink), Fiat-Chrysler (UConnect), Toyota (Entune) • Suppliers – QNX, Nvidia, Panasonic, Continental, Magna (security with Argus), Delphi, elektrobit, Bosch, NXP, Infineon, Harman Kardon, TE, Visteon (Nissan), Audiovox • Shared rides – Uber, Lyft, GetAround, Car2Go (Daimler) • Technology - AT&T, GE, IBM automated car toolkit, Amazon (IoT), Google (Android Auto, John Krafcik/autonomous program, with Mercedes), Microsoft (Azure IoT Hub), Apple (Titan, CarPlay, Siri in Mercedes DriveKit), Mojio, OVMS, Qualnetics, Valeo Park 4U (self-parking), Automatic, Zubie, Vyncs (Sprint)
- 33. News recap • GM + Lyft = https://www.yahoo.com/autos/general-motors- invests-500m-lyft-133349836.html • Ford updating SyncMyRide with connected ar scenario, opens Silicon Valley campus, partners with Google - https://www.yahoo.com/autos/google- pairs-with-ford-to-1326344237400118.html • Delphi Drive - http://www.delphi.com/delphi-drive • BMW buying HERE - http://www.wsj.com/articles/bmw-daimler-audi- agree-to-buy-nokias-here-maps-business- 1438580698 • Stanford Revs lab - http://revs.stanford.edu/blog/735
Editor's Notes
- Welcome This discussion will look at a specific IoT scenario, that of the connected automobile or more broadly, connected vehicle. We will look at the functionality being proposed, a couple of logical architectures for in-vehicle and cloud-provided services, and the financial/opportunity space of connected vehicles through the lens of a business architect and the business model canvas. OEMs, non-automotive technology companies, and suppliers each have different perceptions of this dynamic market and analysts predict that most automobiles will be “smart” in some way by 2030. What does the owner see value in? What does the dealership or service facility see value in? What would constitute a win-win for an OEM and a technology company? Do I really have to give up my steering wheel to an autonomous driver module? We will provide some industry data and look down the road to envision solutions within the realm of possibility.
- Big switch at CES this year to autonomous over “connected” Two main themes in this talk: 1) business model being worked simultaneous with bootstrapping technical systems/solution, 2) lots of mistakes are being made, which could be avoided with proper combination of business value quantification and technical architecture. Accenture – 40% of vehicles autonomous by 2040 - https://www.accenture.com/au-en/insight-realising-benefits-autonomous-vehicles-australia-overview.aspx 94.8% - https://thedianerehmshow.org/2015/09/02/how-cities-can-shape-transportation-technology-for-the-greater-good 80% - http://worldif.economist.com/article/11/what-if-autonomous-vehicles-rule-the-world-from-horseless-to-driverless - also insurance for vehicles will go down from $200B/year in US if only a few self-driving operators are licensed; 90% not needed - http://smarthighways.net/itf-head-insists-90-per-cent-of-city-cars-arent-really-needed-audio/ Lyon - http://www.theguardian.com/cities/2015/apr/28/end-of-the-car-age-how-cities-outgrew-the-automobile Too many roads - http://www.citylab.com/cityfixer/2014/12/a-widely-used-planning-manual-tends-to-recommend-building-far-more-roads-than-needed/383759/ and space - http://www.planetizen.com/node/68574 MIT study on Singapore ride sharing - http://dspace.mit.edu/handle/1721.1/82904 - http://www.theatlantic.com/business/archive/2014/03/if-cars-really-could-drive-themselves-how-many-would-we-need/284549/ Collectively we spend 5.5 billion hours and burn 2.9 billion gallons of gas a year in traffic jams, as well as being responsible for 97% of road accidents on US roads (human error).
- This talk will go through the agenda as follows: Discussion of the business tradeoffs in connected vehicle and autonomous vehicles (loosely following BMC, starting with value propositions) The importance of bootstrapping through customer segmentation Revenue streams and channels, and the impact on major players’ ability to spend/get into market Architecture implications of the business decisions and strategy Wrapup with importance of non-functional requirements in this IoT case study
- This is a subset of potential value propositions which may be included in a connected vehicle program. A brainstorm diagram. Each of these could be considered a feature set within the program scope, but we notice that each has a slightly different value to a particular consumer. OEM and supplier value is separate – this is the payer side: What reduces OEM COGS? What improves profitability (brand, conquest customers)? Customer lifetime value What can I charge for? How much? Who will pay for it?
- Sample internal vision for a connected vehicle program
- If we look at the value propositions, they actually lead to different architectural patterns – different projects we might frame up and build. Traditional telematics is shown as one horizontal bar, but the in-vehicle systems have come a long way in the last 5 years with much improved compute, storage and networking. Finally, we can also see a cooperative model – a mesh – which has long been a computer science topic but now has some very practical uses, like coordinated braking when an accident occurs.
- The major payers in the industry each have a different take on some these basic concepts – here we show that as a progression from simpler to more advanced capabilities along a test track.
- Each OEM has quite an extensive description of their interpretation of connected vehicle – fundamentally, each is trying out a business model while they are trying out feature sets. From the business side, it is not surprising that – as a bolt-on feature set to an existing market – we see a lot of joint ventures and partnerships as well as start-ups in this area. As the connected vehicle architectures evolve, we should see more coordination of changes between companies and government: who would buy a car today which does not have a NHTSA safety rating? Is that the same standard for each vehicle?
- Key technologies for autonomous: automatic braking (false positives), lane detection/route following (better than GPS awareness), vehicle avoidance (how many 9’s?), powertrain optimization, external signaling/communications, driver interface (and handoff), security of operations NHTSA - http://www.nhtsa.gov/About+NHTSA/Press+Releases/U.S.+Department+of+Transportation+Releases+Policy+on+Automated+Vehicle+Development Canberra study - http://www.projectcomputing.com/resources/cacs/
- The key belief in ADAS and autonomous is that closed-loop, sensor-driven feedback will reduce accidents. How much?
- We can define a standard taxonomy of users, customers. We can the segment them based on what their buying preferences are and understand if there is a sweet spot in the value cases.
- First mover may work in some small markets right now, but one thing to keep an eye on is, once you’ve proven viability of a value case, how do you scale this out to a broader fleet? Only 55K Teslas were produced in 2015 (0.1%), 1.9% Lexus, 12% Toyota, 12% Chevrolet There is a different value proposition in each segment, gives an upper bound on cost of solution (by knowing total addressable market) Cheaper per mile is a factor for low-end vehicles Sales figures by manufacturer - http://www.goodcarbadcar.net/2015/05/usa-15-best-selling-luxury-autos-april-2015-sales-figures.html Ford Fuel Cell Vehicle – “We are working on the fuel cell stack research and development with our alliance partners: Daimler AG and the Automotive Fuel Cell Cooperation (AFCC), a Vancouver-based company owned by Ford, Daimler and Ballard.”
- Looking at the revenue streams and channels for delivery establish what an upper bound might be on initial trials. Source: http://www.detroitnews.com/story/business/autos/2015/02/22/toyota-per-car-profits-beat-ford-gm-chrysler/23852189/ Family of 4 = 6.25 vehicles per adult, 1.75 per child, $30K per vehicle average.
- Value to supplier Build platform once, sell multiple First mover disadvantage of having to build out the network, product – potential barriers to entry (OEM’s cloning) Telco and other sustaining costs (call center, portal, analytics, etc.) – how to bootstrap
- Pricing power most important question according to Buffett. Suppliers suffer from transfer pricing (keeps price low b/c OEM can shop around) Many examples of loss leaders/free parking where the manufacturer produced the service but accepted small/no/negative margin; it may cost $100M to get in the game
- Pricing power most important question according to Buffett. Suppliers suffer from transfer pricing (keeps price low b/c OEM can shop around) Many examples of loss leaders/free parking where the manufacturer produced the service but accepted small/no/negative margin; it may cost $100M to get in the game
- An early view of message passing patterns for telematics Image courtesy of Microsoft and Clemens Vasters - http://blogs.msdn.com/b/clemensv/archive/2014/02/10/service-assisted-communication-for-connected-devices.aspx
- We’ll see that there are more patterns.
- Value to traditional OEM Value to owner less important except as to brand (when given away free) – who to bill then? Just absorb? That means we’re limited in amount of spend (probably $100s of MM per OEM but unlikely $B’s) Warranty would have to exceed cost of system Willing to try features (like parental monitoring) as long as new car cost can support Sub-case – value to business partners (dealership / maintenance organizations) – CRM is a big case… but predictive maintenance may just shift value, not increase value Sub-case – value to premium or green OEM (read: Tesla) – small market segmentation
- Sensors to computation to actuators The modeling cycle for algorithm development is very important – tuning the object identification and reaction is the key algorithm for autonomous vehicle Sensors LIDAR, radar, ultrasound, speed/direction (other than GPS) Compute – Nvidia; in-vehicle network CAN bus V2V – radio/Bluetooth/near-field frequencies… common ones for V2I Modem for certain types of comm – must have reliable transport protocol; possibly redundancy on some systems
- Image courtesy Audi Value is where you sit – “(both in terms of where you want to go and what you can actually achieve)” More services like Bing Maps and Skype Market validation of business model Cloud = IoT solutions (connectors) and big data; mobile = the phone factor in the vehicle (less Windows Embedded)
- IBM - http://m2m.demos.ibm.com/connectedCar.html AT&T - https://m2x.att.com/ Uber - http://www.npr.org/sections/alltechconsidered/2016/01/21/463750503/business-travelers-often-skip-the-rental-car-use-uber-instead CAR - http://www.cargroup.org/ NXP - http://www.nxp.com/applications/secure-connected-vehicle:SECURE-CONNECTED-VEHICLE GENIVI – LINUX TDI in car alliance Mercedes - http://drive-kit-plus.com/en/#s/video/siri Google auto (Mercedes Google Projected Mode) – self-driving - http://www.extremetech.com/extreme/187438-googles-autonomous-car-gets-a-b-in-driving-test-not-great-but-better-than-most-of-us VREP - http://www.v-rep.eu/ MIT - https://www.technologyreview.com/s/520431/driverless-cars-are-further-away-than-you-think/ Volvo - http://blog.caranddriver.com/volvo-has-a-production-viable-autonomous-car-will-put-it-on-the-road-by-2017/ & http://gpsworld.com/volvo-presents-system-for-integrating-autonomous-cars-into-traffic/ & Volvo – Hololens for buying experience - https://www.youtube.com/watch?v=DilzwF90vec Summary of driverless - http://robohub.org/how-do-self-driving-cars-work/ Audi - http://blog.caranddriver.com/audis-driving-cup-asks-students-to-program-super-cute-teensy-audis-to-drive-autonomously/ Continental - http://articles.sae.org/10794/ Delphi - http://www.extremetech.com/extreme/203216-delphi-self-driving-car-goes-coast-to-coast-autonomously MITRI - http://www.umtri.umich.edu/ & http://www.npr.org/sections/alltechconsidered/2015/07/31/427733153/in-michigan-a-testing-ground-for-a-future-of-driverless-cars
- Setting up in silicon valley doesn’t change the business model – OEMs are transactional, not subscription – how can a Ford rent a car by the hour?