Telematics and the speed of innovation

The world of consumer electronics changes in a flash. Six years ago, the iPhone didn’t exist; now, it’s on its fifth generation and has enjoyed pervasive market penetration around the world.

Likewise, three years ago, the iPad was yet to be released; Apple latest iPad, along with its tablet kin, is enjoying similarly sweeping adoption. All of that innovation took place within the product life cycle of a single automobile.

It’s a mixed blessing for the telematics industry. On the one hand, the consumer electronics industry constantly increases the public’s appetite for connectivity, which is bound to extend into the vehicle. On the other hand, consumer electronics creates an expectation of constant evolution and near-instant accessibility, which is difficult to achieve for an auto industry that has historically worked on slower product life cycles, on the order of three to five years.

The question for auto companies that want to embrace in-car connectivity is: How do you separate the parts that need to evolve on a consumer electronics lifecycle from those that need to stick with the automotive cycle? (For more on telematics and product life cycles, see Industry insight: Telematics and apps.)

“The 18-month cycles are very real in this space,” said Anupam Malhotra, manager of connected vehicles at Audi of America, at the Telematics Detroit 2012 conference. “It’s not typical of automotive, but that’s the expectation coming from the consumer electronics world. How do you actually deal with that?”

The ‘controlled openness’ theory

The answer in the minds of a growing chorus of thought leaders in the telematics and automotive industries is the concept of ‘controlled openness’, which entails enabling faster, more flexible product life cycles while maintaining control of the process.

“Going forward, if you want to be successful in this space, you have to have flexible technology architecture and a business and partner strategy behind this,” said Thilo Koslowski, vice president and automotive practice leader at Gartner. “You have to be as open as possible, but you still have to have the control so that you can sell the experience going forward.”

Malhotra agreed: “The best way to control the experience in the vehicle is to control the entire channel from the backend all the way through the vehicle and to manage that interface, but do it in a way that meets the needs of real-time information that’s accurate, current, and relevant.”

John Ellis, global technologies connected services and solutions, Ford Motor Company, arrived in the automotive space by way of consumer electronics, so brings a valuable perspective to the controlled openness discussion.

“For 110 years, [the auto industry] felt we needed to define everything and understand every interaction,” said Ellis. “From the consumers side, I’m here to show you that when I build an ecosystem that I have no idea what they’re going to do with it, ensure it’s safety, and then allow the creativity to happen, cool stuff happens.”

Controlled openness in practice

Auto companies’ embracing of controlled openness has already manifested in concrete products and initiatives.

Audi, for example, has released a new modular infotainment platform in its A3 brand. The platform takes all the electronics lifecycle-related hardware and software and puts it on a single multimedia extension board (MMX board), which is a plug-in module into the overall multimedia module. The software running that board is also modularized.

“What this does is create a capability where the automaker is not the limiting point in terms of deployment of these technologies into the vehicle,” Malhotra said. Instead, the only limiting point is consumer demand: “When can we be sure that there is enough prevalence and usage of these technologies that we can go ahead and adopt in automotive?”

When Nvidia announced a new graphics processor, Tegra 3, Audi was able to announce the inclusion of that processor in its vehicles at the same time. As a result, Malhotra said the company can control everything in its vehicle while simultaneously responding to latest innovations.

Open-source connectivity

Ford, meanwhile, has unveiled Open XC, its open-source connectivity research platform, which third-party developers can use to create apps for Ford cars, with immediate access to vehicle data and sensors.

“If I can give you this extension module … teach you how to use it in a safe manner, and work with regulators to educate them on what this means, we’re going to see some really cool stuff that we couldn’t even anticipate,” said Ellis. (For more on in-car connectivity, see Industry insight: The connected car.)

Ford also has embraced a Microsoft operating system for Ford SYNC that could be easily upgraded so that the infotainment system doesn’t lose its currency the day it is sold to the consumer.

Steven Bridgeland, senior product manger, Microsoft, said that moving forward, one of the biggest opportunities on the controlled openness front will be integrating head units that are more advanced than what they’re actually delivering today—faster processors, more memory, more capabilities. That way, “three to four years from now when they’re able to take advantage [of those capabilities,] they don’t have to rip out the hardware,” Bridgeland said.

Challenges to controlled openness

One challenge with controlled openness is how car companies open themselves up to external innovation while maintaining a concrete and cohesive sense of brand identity. Some companies may not care if the infotainment system feels like an independent product, but others do, and the last thing they want to end up with is a blank terminal mode in their dashboards.

A blank terminal mode “makes it easier to [extend the] controlled openness idea across the value chain ecosystem, but it may make it difficult to create differentiated experiences,” said Koslowski.

“I can’t really point out in many cases where a premium car manufacturer’s connected vehicle solution is so much better than a volume manufacturer’s solution,” he continued. “I think we’re missing the boat on that opportunity.”

“You have to get an overall brand connection with connectivity and telematics in the car,” echoed Hakan Kostepen, director of strategy and innovation, Panasonic Automotive. “That is what is missing.”

A second challenge, which is also potentially a way to address the first challenge, is education. Do external partners understand the unique challenges of the automotive environment? A car is a very different platform from a smartphone, and it comes with attendant regulations and complications.

“The biggest issue for us is not so much technology as education holistically,” said Ellis. “Education of yourself, education of the regulatory bodies that we operate within, but more importantly education of ecosystem partners. What does it mean to actually work in the automotive industry? Just because someone puts something on a cell phone and brings it into the car may or may not make that an automotive thing.” (For more on telematics ecosystems, see Telematics and the app ecosystem and Telematics: To embed or not to embed?)

If auto companies can succeed in this respect, they can extend an understanding of their brand out into the ecosystem, thus marrying the best of open innovation and controlled manufacturing.

Andrew Tolve is a regular contributor to TU.

For more on connected cars, see Industry insight: Telematics and apps.

For the latest on telematics ecosystems, Telematics Detroit 2013 on June 5-6.

For all the latest telematics trends, check out Insurance Telematics Europe 2013 on May 7-8 in London, Data Business for Connected Vehicles Japan 2013 on May 15-16 in Tokyo, Content & Apps for Automotive Europe 2013 on June 18-19 in Munich, Insurance Telematics USA 2013 on September 4-5 in Chicago, Telematics Russia 2013 on September 9-10 in Moscow, Telematics LATAM 2013 in September in Sao Paulo, Brazil, Telematics Japan 2013 on October 8-10 in Tokyo and Telematics Munich 2013 on November 11-12.

For exclusive telematics business analysis and insight, check out TU’s reports: In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.