Winning the telematics race through diversity

Winning the telematics race through diversity

The automotive future is on track to resemble scenes from “Knight Rider,” the 1980s television show starring David Hasselhoff as a modern-day knight and a Pontiac Firebird Trans Am as his supercomputer-powered sidekick, KITT.

That’s at least what Scott Fosgard, a spokesperson for infotainment at GM, envisions. “When I drive around now, I think of the old TV show,” Fosgard says. “You’re thinking of a need on the fly, and your car is solving that problem for you before you reach your destination. It’s the ability to redefine what a car is, and how it does it.”

Perhaps your car calls ahead to notify your next appointment that you’re running late—and it reserves a parking spot for you so you can get inside as quickly as possible. Or it helps you locate a restaurant to your liking in an unfamiliar city. Or it alerts you to the need to leave for your next meeting, taking traffic and current conditions into account.

The automotive industry is not there yet, but the time when the connected car allows for extensive personalization, and even starts to think for the driver, is not far off.

“OEMs are trying to keep up with mobile-device makers,” says Anna Buettner, a senior analyst in automotive and infotainment at IHS. “The vehicle can’t be a white spot where connected devices don’t work or integrate.”

Looking ahead

What, then, does the road to this connected future look like?

According to a 2013 IHS Automotive report written by Buettner, worldwide sales of embedded systems like GM OnStar or BMW ConnectedDrive reached 7.34 million units in 2012 and will exceed 45 million by 2019.

At the same time, sales of telematics systems enabled by connecting to a mobile device – Ford SYNC and Kia’s UVO are two examples of these – are expected to grow from 3.16 million units sold in 2012 to nearly 18 million units by 2019.

Higher sales volumes alone won’t put connected cars in KITT’s league. What is being delivered must evolve. And that’s what the industry is working on right now.

Beyond safety and security

The safety and security features that once had a starring role in telematics packages are now growing into expected commodities. “If [a car doesn’t] have reliable connected services, it might as well just have a radio,” Buettner says.
 
So is navigation.
 

From now on, it’s premium services that will attract and retain customers willing to pay for telematics, Buettner believes. In some cases, OEMs are already opting for mobile-based infotainment solutions that do not include safety and security functions at all.

According to Buettner, the current telematics leader is GM with OnStar, as measured by sales volumes and longevity in the market. GM has made embedded telematics standard on every model of their four U.S. auto brands.

But the field could be poised for change. She cites Volkswagen’s emerging MIB platform, which was introduced this year and will be deployed globally, and Toyota’s region-specific solution as two approaches to watch. 

(For more on the future of the connected car, see Telematics: What's next for apps and services, part I and Telematics: What's next for apps and services, part II.)

Options, options, options

Buettner sees the current move by OEMs toward providing Internet radio as an example of the mobile industry’s influence and the need to diversify the in-car app offering. “They can’t just do Pandora for the U.S. and one in Europe, and assume everyone’s happy,” she says.

 

In fact, as many as 10 different radio apps may be needed to give customers the choices they expect. “It does involve some R&D to implement an app, but [OEMs] want to be as broad as possible so they can cover all the Internet radio users.”

By that logic, the must-haves of the future are actually options rather than one particular fabulous feature, Buettner says. “It’s about customization, different demographics, personal needs,” she says. “OEMs need to let customers customize their experience in the car.”

GM seems to have received the message. In January, the company announced a new app framework and an accompanying app store, so users can pick and choose what they want to have in their vehicles from a range of GM-certified options.

“We’re never going to sanction playing Angry Birds or watching YouTube while you drive,” Fosgard says. But he sees plenty of potential for things like Yelp!, Urban Spoon or Open Table, not to mention a host of things “no one has thought up yet.”

(For more on the impact of consumer electronics, see Telematics and the speed of innovation.)

Engaging app developers

To ensure the widest array of apps possible, GM is reaching out to developers currently creating for smartphones and tablets. One way it hopes to entice them is by offering an app framework that is based on HTML5 and Javascript, the preferred developer languages.

Beyond smartphone-style apps, GM also plans to allow developers to create “car apps” that take vehicle data and make it beneficial to the driver. These apps will be unique to OnStar-equipped vehicles.

Perhaps drivers will want to send a summary of their habits behind the wheel to their insurer as leverage for a better premium, Fosgard suggests. Or what if a Gas Buddy-style app not only knew where the stations were along your route but also knew your driving habits and your vehicle’s maintenance status and could advise you to fill up before you leave Indiana, where taxes are lower.

“No one has the volume a developer cares about as an individual OEM,” Fosgard continues. So GM hopes a more open approach will mean a larger array of in-car options for their drivers, even if some of these apps are eventually available in other OEMs’ vehicles as well.

Captive audience

“People spend 450 hours each year in their vehicle, so there’s a unique opportunity to engage with customers in a meaningful way,” says Nick Pudar, director of the developer ecosystem at GM. His favorite fantasy? An iPhone-style Siri experience in your vehicle.

GM also plans to include 4G LTE connectivity in their vehicles as of the 2015 model year so that the car itself can provide the Internet connection need to power the apps. “Here we are as cars transition from analog to digital,” Fosgate says.

And they’re doing it fast. According to Fosgate, infotainment has moved from 25th to 4th on the list of vehicle-related features people care about in a span of just five years. This is an unprecedented change. “It’s been price, design, and fuel economy [at the top of the list] for the last 75 years,” he says. “Rock solid.”

He cites this as more evidence that his “Knight Rider” vision is not just a daydream. The rise of connected culture is changing what people want and expect from their vehicles. “So as we look at the next 10 years,” he says, “this will reshape the industry.” 

Jessica Royer Ocken is a regular contributor to TU.

For all the latest telematics trends, check out V2V & V2I for Auto Safety USA 2013 on July 9-10 in Novi, MI, Insurance Telematics USA 2013 on September 4-5 in Chicago, Telematics Russia 2013 in September 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: Telematics Connectivity Strategies Report 2013The Automotive HMI Report 2013Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.


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