Consumer Telematics Show 2014: Consumer electronics to shape the connected car

Consumer Telematics Show 2014: Consumer electronics to shape the connected car

It’s highly fitting that some of the biggest connected car announcements are happening as the Consumer Electronics Show (CES) gets underway in Las Vegas this week.

Consumer electronics has been an acknowledged influence on the design of in-vehicle infotainment systems for some time now. But never before has its impact been felt in so many different areas – from the way car OEMs are beginning to design the connected car user interface to how hard they try to catch up with consumer electronics’ rapid development cycles.

The slew of announcements started on Sunday with chip maker NVIDIA presenting its new Tegra K1 mobile processor, an automotive-grade version of the same GPU that powers the world's 10 most energy-efficient supercomputers. The plan is to use the K1 to advance self-driving cars advance from the realm of research into the mass market.

Chevrolet followed with an announcement that it will offer the largest number of vehicles available with built-in 4G LTE. “This technology is not just for the rich and famous, it’s for the people and that’s what’s cool about this,” said Alan Batey, Chevrolet’s executive vice president, at a press conference, pointing out that broadband connectivity will be available from the Spark, Chevrolet’s smallest car, to Corvette Stingray. “It opens up a world of incredible, personalized opportunities."

Then on Monday came the announcement of the forming of the Open Automotive Alliance, a new global alliance of Google, Audi, General Motors, Honda, Hyundai and NVIDIA committed to bringing the Android platform to cars starting in 2014. 

And late in the evening, also on Monday, Audi presented a self-driving A7 sedan.

In more than one way, yesterday’s Consumer Telematics Show, a one-day Telematics Update conference also held in Las Vegas, provided the prefect forum to discuss many of these and other developments.

Consumer electronics poised to disrupt telematics

The opening keynote went to Thilo Koslowski, vice president – automotive vehicle ICT, Gartner, who predicted that consumer electronics trends will cause some “pretty big” changes and shifts in the entire connected car ecosystem in 2014 and beyond.

According to Koslowski, these changes will include wireless carriers and Internet companies like Google asserting themselves to the point of absorbing parts of the connected automotive value chain and perhaps even displacing some established players.

He predicted a vendor consolidation as there are too many technology providers chasing too few car manufacturers. And he said over-the-air software upgrades of in-car connected systems will transition from an extra to something that consumers expect.

Koslowski also warned that the pace of innovation will continue to accelerate, and no one will enjoy a competitive advantage for very long. “Being the first to do something really well will only buy you a little bit of time because eventually everybody will do this,” he said. “2014, in my eyes, is the year where automotive companies really have to understand technology leadership because that technology leadership will determine the company’s success going forward.”

According to him, each carmaker will have to make a choice.

“You can either treat the whole connected vehicle space as a checklist – you have to do it, the consumers are asking for it, and, if you don’t have it, you are missing a pretty important feature,” he said. “Or you can take it an extra step further by thinking about creating a fully connected customer experience. … That’s much more difficult to do, but that ultimately would be the way in my eyes to differentiate. It’s not going to be on the feature side, it’s not going to be on the app side, I don’t think it’s even going to be on the OS side. It’s going to be about how you really create a different experience for your customers.”

Putting Big Data to work

What will also change is the idea of data and data management, according to Koslowski. “I believe that’s becoming the connected vehicle’s new fuel,” he said.

The new depths of insight into where, how and by whom vehicles are being driven will create new customer relationship and consumer experience management opportunities, and result in new business models and opportunities for monetizing the connected car.

But companies must be careful not to overstep “the creepiness line” – knowing too much about the customer, Koslowski said.

Jim Flavell, senior vice president, MyAssist, agreed. “There is this great aggregation of data that is occurring, and it’s a great opportunity,” he said. “At the same time, there is also a great responsibility … to use that appropriately and to provide the right degree of personalization. It’s not just analytics, but analysis of customers and how they want to be engaged with. There is no question, though, that there is a wonderful opportunity to transform the experience inside the cockpit of the automobile.”

Koslowski continued: “Maybe, at some point, you will actually get a car for free  for a lifetime data plan with a carrier. It might sound like a far-fetched idea, but if you actually change this to something a little bit less dramatic, maybe a discounted vehicle purchase with an eight-year data contract … I was surprised to actually see that quite a few would be interested, 38%.”

Koslowski concluded on a bold prediction: “I actually believe that in 10to 15 years, automobiles will become the coolest mobile device, cooler than smartphones and even tablets because cars have so much more computing power, they have so much more real estate for displays and sensors, you know exactly where people are because they are sitting in their seat and really can’t get up while they are driving, so they are a captive audience. I believe that the car industry has a huge opportunity to be at the top of all mobile devices.”

Smartphone integration revisited

Moving on, Jaguar Land Rover and Bosch SoftTec reaffirmed their commitment to smartphone integration by showcasing InControl Apps, a jointly developed smartphone integration platform launching on Jaguar Land Rover vehicles this year.

InControl Apps is compatible with both Android and Apple smartphones and allows users to bring their personal content into the vehicle and interact with a range of smartphone apps via Jaguar Land Rover’s in-dash touchscreens.

(In fact, Jaguar Land Rover’s presentation was one of several suggestions that smartphone integration might be making a comeback, of sorts, after a period of time when it was starting to be written off as a mere stepping stone to far more sophisticated embedded connectivity.)

While developing InControl Apps, Jaguar Land Rover paid close attention to customer expectations. “We wanted to take a customer approach for the infotainment and connected app technologies,” said Peter Virk, head of connected technologies and apps at Jaguar Land Rover.

This, for example, resulted in allowing users to bring in their devices and to use them in the car, rather than forcing an embedded solution on them. And it also informed Jaguar Land Rover’s decision to keep the DNA of the original smartphone apps as opposed to trying to remake their look and feel to reflect Jaguar Land Rover’s branding.

The first wave of more than a dozen InControl-compatible applications includes iHeart Radio, Glympse, CitySeeker and Parkopedia.

Telematics 3.0

In a presentation titled “Telematics 3.0 Becomes A Reality,” Kevin Link, senior vice president at Verizon Telematics, called for expanding the telematics value chain beyond providing the driver with a solid user experience.

According to him, Telematics 3.0 also needs to involve the OEMs, dealers and the wider society, which expands the value chain, introduces opportunity to open up the business model and then “hopefully” drives a greater adoption of the connected car, “leading us to things like V2I, V2V and autonomous driving.”

He suggested starting with simple things like usage-based insurance (UBI) and using connected vehicles to provide traffic probe data, but then painted a much bigger picture:

“We can start looking at behavioral incidents within a vehicle, what radio station you listen to, did you react to that commercial, did you change channels, did you partake in one of those vendors? We all know the sensitivities of location, but imagine hearing a commercial and then driving to that location. There is value there. … What about a POI search that’s done off-board and that POI search generates a location that the vehicle then drives to. I would equate that to a click-through. There is value to that.

“Even more provocative … you have trip data, everything about the trip, then you have engine data, everything about the servicing of the vehicle. We were approached by a very large company that is one of the largest aggregators of pre-owned cars, and they would love to have the value of the data – of how the car was both driven and serviced, and where it was driven. Imagine the value of that.

“And trust me, I understand the implications. But we have to start thinking outside of the subscription, if you will. … Telematics 3.0 extends that value proposition and gives us an opportunity to create value with tons of opportunity – from media companies, from aftermarket product providers, from content providers, from real estate companies that want to look at drive-bys, to telecom companies that want to know when their towers are out, to research companies that are looking at customer behavior, to transportation companies that want to be smarter about logistics in mass transportation, traffic aggregators, city planning experts.  The list goes on and on and on.”

The obvious challenge, according to Link, is how to get through privacy concerns. “I don’t know the answer to that,” he said. “But there is no doubt in my mind that we’ll get there, especially with the next generation of car buyer.”

The need for higher adoption of connected services

At several points during the day, speakers brought up the importance of dealers in helping sell connected services and thus increase adoption rates, which are still relatively low and are seen as holding back innovation in the space.

But another way of achieving higher adoption is simply by making the in-car connected systems more appealing and easier to use, others pointed out.

“We are starting to see a few manifestations of the bigger, more eye-candy appeal of some of these solutions,” said Charles Koch, manager new business development, American Honda. “Certainly, Tesla and Audi are stepping out with some solutions that are really starting to be exciting. I think the challenge to the rest of us with mass-built cars is to bring more of that experience to everyday drivers as well because I think that’s what they enjoy about buying a new car. So I am bullish about where we can all go to make that a bigger part of the sale.”

The upgradability challenge

The issue of flexibility and upgradability of in-car connected systems also came up time and again, with different solutions offered by different manufacturers.

Steve Schwinke, director of application development, global connected consumer, General Motors, favored adding extra processing power and memory to accommodate future updates.

But others argued for infotainment systems to be built in a modular fashion with the possibility of replacing outdated parts for new ones, whether these are video graphics processors, wireless technologies or voice controls.

“In three years, whatever car you have will be outdated, so you have to get into partitioning, physical, logical, software partitioning,” said Hakan Kostepen, executive director – product strategy & innovation at Panasonic Automotive Systems America.“You have to think about architecture, upgradability and business models altogether to solve this problem.”

The all-new Audi A3, which features the next generation of the Audi Connect infotainment platform, already embodies this approach. In order to keep up with consumer electronics cycles, the platform is built as modular and upgradable both in the vehicle and on the platform’s back end, said Anupam Malhotra, senior manager, connected vehicle, Audi of America.

The new Audi A3 also comes with embedded 4G LTE connectivity, which is seen as yet another way of not only enriching the user experience with things like streaming media and Wi-Fi hotspots but also extending the life of in-vehicle infotainment systems through offloading some their computing and data storage needs to the Cloud.

Consumer expectations to keep growing

Consumer expectations are only going to grow, so car makers need to be ready, said Chris Ruff, president and CEO, UIEvolution.

“Today the car is a consumer electronics device, and it also is a screen,” he said. “And as a screen, people want to bring their content with them. But as a consumer electronics device, there is an expectation of improved interface. … As we look at the next five or six years, how are we going to address the fact that consumers want an ever increasing performance, they want better usability? When a bug happens on their iPhone, they download new software. … Over time, they are going to want to see that same seamlessness. Especially the young generation wants to see a car that will continue to evolve.”

Said John Ellis, global technologist, connected services, Ford Motor Company: “For us, the challenge is going to be keeping the eyes on what’s happening in the consumer space and then building the most robust sandbox that is defensible and protects the driver and occupants in the case of driving, but then allows for the extensibility, the bring-in ability that allows for you to personalize it within boundaries that are predetermined either by the regulators, by ourselves [or] by the industry at large.”

Jan Stojaspal is the executive editor of Telematics Update.

For all the latest telematics trends, check out Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, and V2X and Auto Safety USA 2014 on July 8-9 in Novi, Michigan.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013The Automotive HMI Report 2013Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.


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