Telematics Munich 2013: Day Two

Telematics Munich 2013: Day Two

Participants at the second, and final, day of the Telematics Munich 2013 conference on the connected car received a bracing wake-up call when they were told that the current state of the telematics industry was just not good enough.

“There is a disconnect,” said Jim Nardulli, senior vice president of automotive sales at NNG. “In 2013, we still can’t deliver a map update properly to a car. This is unbelievable to me.”

Nardulli warned that consumer expectations of the connected car are being driven by smartphones and tablets, and that the automotive industry was failing the consumer.

He illustrated his point by citing a recent newspaper story that, under a headline demanding that car makers stop delivering “crazy” infotainment systems, cited an unexpectedly high rate of failure in those in-car systems. “Since June 29, 2007, 400 million iPhones have been sold,” he noted. “Consumer expectations about how this stuff should work are firmly set.”

He also cautioned OEMs that they were facing a problem with young drivers, who have the least cash on hand but the highest expectations when it comes to in-vehicle infotainment. “There’s no such thing as low end in the app culture,” he said. “Buyers of entry-level cars are the most demanding demographic. Low-end technology will not satisfy them. If you give them something that doesn’t work, you’ll have a dissatisfied customer.”

What’s more, malfunctioning infotainment damages the brand, and it lets potential revenues go begging.

Remember the dealer

The failure of dealers to be included in the value chain was another cautionary note struck on Tuesday. “The connected car should allow the dealer to treat the cars he sells as a fleet,” said Roger Lanctot, associate director, automotive multimedia & communications service, Strategy Analytics. “That’s just not happening now.”

Car dealers have not become part of the automotive telematics system, he said, and car makers are “tied up in knots about how to bring the dealer into the telematics solution.”

Massimo Cavazzini, EMEA product planning and institutional relations, infotainment, Fiat, agreed that the connected car represented “a huge opportunity to increase [brand] loyalty.” But he said that before the dealer could be an active part, “we first need to fix the basics.”

The first step, he said, is to connect dealers to the Internet. He said Fiat had a system with which the company can communicate with its dealers “with one click,” but he admitted that not all Fiat dealers were on it yet.

Jürgen Daunis, senior account executive at Verizon Telematics, noted: “There is a lot of revenue to be had, so we must incentivize the dealer. We need to educate dealers about the chance we have to use them.” He added that the dealer is the most important sales point to sell telematics services and a key part of the process to retain the customer.

Pieter van Rosmalen, global vice president of retail network solutions at MSX International, said the dealer and the manufacturer must realize that they are both dealing with the same customer. In addition, dealers are an important source of car and other data, and could be a link between the car and the OEM. “They need to share data,” he said.

The pain of gaps in coverage

The rollout of 4G LTE connectivity – at least in the United States and Europe – was again touched upon. As Daniel Wittwer, a strategic manager at BMW, said, “LTE is the basis for all new services in the car.”

However, he said that technological advances were still needed in order to give customers a continuous connected car experience, even when there are gaps in signal coverage. “This causes a lot of trouble,” he said. “Let’s say we have music streaming, and someone is listening to a song which suddenly stops because there is no data coming.” 

According to him, the introduction of data caching is one solution.

Magnus Lundgren, director of service enablement at Ericsson, said his company provides several caching methods, and that it was also building out its networks to limit connectivity dropouts.

NNG’s Nardulli agreed emphatically. “Mission-critical services have to work, no matter what,” he said. “Navigation has to work. You should have on-board embedded stuff to make sure it works.” He added that the car should be as complete as possible without a connection. “We’re about 15 years away from total connection,” he said.

Rays of optimism

Other speakers were more focused on the good progress being made on a number of fronts, including advanced driver assistance systems (ADAS), driverless cars and augmented reality.

Jan-Maarten de Vries, vice president product management & marketing, automotive, TomTom, said that “all ADAS systems are moving towards the goal of auto-driving” and suggested that it was coming in the not-too-distant future.

And Marc Necker, manager, augmented reality, Daimler, said that in-car augmented reality will soon be a reality in his company’s vehicles – beyond basic head-up displays, which are already in use – and that the service will enhance the customer’s in-car experience.

“We won’t sell more cars because they are connected, but we will sell fewer cars if they are not,” he said. “And selling cars is about selling emotions. Augmented reality is going to help us create emotion.”

The reason to add augmented reality was to provide “a natural and easy access to information for the customer,” he said. 

Eventually, augmented reality will also play a role in the emergence of driverless vehicles. According to Necker, passengers will need a great deal of reassurance that their self-driving cars know what they are doing. And augmented reality will be there to show them what the car is “thinking.”

“This creates confidence and makes it look nice,” Necker said. “Augmented reality creates value. That’s why we want to put it in the car.”

Final (somewhat downbeat) notes

In his closing keynote statement, Lanctot returned to pessimism. He cautioned that the fully connected car was still four to five years from becoming reality and that the industry had hit a wall. “There are lots of cars with embedded modems, lots of inactive modems, lots of subscriptions not being used,” he said. “There are too many platforms, applications and content chasing too few connections.”

In more than one way, car makers will need to look for ways to simplify their already complex infotainment systems, said Andrew Hart, head of strategy & innovation division, SBD. “More does not equal better,” he cautioned, adding that consumers are already hard-pressed to absorb the current range of connected services.

According to Hart, 41% of Hyundai owners in the United States never used any of the services available on their Blue Link infotainment platform, a majority of those recently surveyed by SBD – these were owners of both Hyundai and half a dozen other car brands – complained about there being too many features, and not a single respondent said his connected car needed more features.

Chief annoyances included inconsistent menus/tabs, confusing icons, uncommon input conventions, cultural insensitivities and, in the case of Mercedes, the absence of a home button.

When SBD asked Ford SYNC owners about which feature they were most satisfied with, the answer was a hands-free mobile phone kit, something that was already available when Ford first launched SYNC six years ago.

Hart called these findings “worrying” as OEMs spend billions of dollars on growing their connected car offerings, while, instead, they should perhaps be looking at paring them down.

As a result, the next time OEMs sit down to discuss a platform update, they should first consider what they can remove, then what they can simplify and only then what they can add, with the last step being optional, Hart said.

(For our day-one coverage, see Telematics Munich 2013: Day One.)

Siegfried Mortkowitz is a regular contributor to TU. Jan Stojaspal is the executive editor of Telematics Update. 

For all the latest telematics trends, check out Telematics for Fleet Management USA 2013 on Nov. 20-21 in Atlanta, Georgia, Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco, Consumer Telematics Show 2014 on Jan. 6 in Las Vegas, Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, and Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany.

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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