Telematics and in-car apps: Making infotainment cost-effective

Telematics and in-car apps: Making infotainment cost-effective

If in-car applications and infotainment services are to catch on with consumers, they have to be delivered at acceptable price points.

So OEMs and suppliers are developing strategies, like following the consumer electronics market and shortening production cycles, to contain costs.

Hardware costs remain a primary consideration, and smart OEMs keep a close eye on the consumer electronics space, says Paul Sykes, segment marketing manager for Renesas, a tier 2 supplier of infotainment systems.

“When a tech is adopted in consumer electronics, the volume grows, that drives down prices in the market, and then the automotive guys can take advantage of it,” Sykes says.

Leverage the volume

This has happened already with LCD panels, for example; every cell phone shipped today has one, so there are millions and millions in the market.

“Smartphones have a lot of these types of technology—graphics, haptics, speech recognition,” according to Sykes, “so these consumer products and markets drive a volume that enables us to leverage that volume.”

Each product generation has new features and, as those features become more widespread, suppliers can simply integrate the technology into their offerings.

Rik van Aken, director of marketing and product management, automotive, for TomTom, says his company has found efficiencies in the combined purchasing power of its consumer electronics and automotive divisions.

“We look at the design of consumer electronics products and automotive specifications, and try to get the best of both worlds,” van Aken says.

“We buy more than 10 million screens per year, so if we use the same supplier for automotive screens, we get purchasing benefits. And we use off-the-shelf components when we can.”

Flipping the value chain

The automotive industry is coming to grips with the idea that it needs to move faster, shortening product cycles to keep up with innovation in consumer electronics. (For more on the importance of innovating quickly, see ‘What telematics firms can learn from Web 2.0’.)

TomTom decided to reverse the value chain, coming to OEMs with products and services on its own terms, thereby saving millions in development costs—savings that can be passed along to auto buyers.

“We looked into the automotive space and saw that navigation at that point was a niche product, only featured in high-end cars and costing around $2,000 as an option,” according to van Aken.

“In the retail consumer space, we made navigation available to the mass market by launching portable navigation devices. We looked at the auto space and said,

‘There’s no reason why we can’t do the same there.’”

TomTom created a separate automotive business unit and analyzed the quality specifications of car manufacturers, working from the company’s own roadmap instead of to car manufacturers’ specifications.

Of course, TomTom needs to offer some customization so that manufacturers can differentiate their offerings

To that end, the firm is faced with limited choices during offering discussions.

“There is a shift in the market from manufacturers dictating to suppliers,” van Aken says.

“We work with manufacturers that want to benefit from this kind of discussion and roadmap.”

Customization and cost cutting

According to Renesas’ Sykes, “In infotainment systems, software is the most expensive part of the development process for the tier 1, so it becomes the most expensive line item for the OEM.”

So Renesas takes a similar approach to its hardware strategy, by working directly with the major players in the software ecosystem to incorporate their software on its chips.

Sykes says that this kind of business deal is typically done between the software developer and the OEM.

Renesas begins work with software companies before the OEMs make a deal with them.

“A lot of these pieces of software don’t help the OEMs differentiate themselves, so those are what we focus on,” Sykes says.

“We want to enable the tier 1 and OEM to focus on their value-added.”

TomTom also tries to lead manufacturers as much as possible when it comes to the user interface.

Many automotive infotainment HMIs don’t follow the conventions of the consumer electronics industry, making them confusing for consumers and more costly for companies like TomTom that sell to both sectors.

“We try to benefit from our consumer electronics development efforts and come up with user interfaces that are easy to use and also easier to develop,” van Aken says.

“At the same time, we recognize that each interior is different, and the navigation system and UI have to fit in. On a case-by-case basis, we discuss it with the manufacturer and come up with an approach that suits their needs.” (For more on the future of the HMI, see ‘Telematics: The user interface as strategic advantage’ and order Telematics Update’s must-read ‘Human-Machine Interface Report’.)

It’s not always easy to balance an automaker’s branding with ease and standardization, but, as prices for navigation services keep falling, OEMs need to figure this out.

if you're interested in this show, take a look at our Content & Apps for Automotive USAupcoming show.

Susan Kuchinskas is a regular contributor to TU.

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