Linkedin post too windy - Infotainment 2015 and beyond

Recently I took part in a linkedin thread on the future of Infotainment (see original thread here: http://tinyurl.com/2f37cqh). As I started to respond I realized that I had too much information for a simple post on a Linkedin group. So I took my response to my blog. Here it is:

(snip) Ok, so from my perspective the future of car infotainment is going to combine many of the posts in this thread (I will provide a summary then go into it a bit). For sure closer device connectivity will happen. Features that OEMs either find interesting business models around, are table stakes or that they want to ensure a consistent experience across all vehicle models and devices, will likely move to be built in. Then you will see a focus on cloud / internet based applications and services (with some partition with local content for non-connected times). Many of the systems will combine all three (pocket, cloud, car) applications, content and services.  How about a deeper dive into each of these areas?

The “Pocket”

In the short term, devices will address the impedance mismatch between the OEM vs Consumer device development cycles. You will first see this with standardized interfaces (like Bluetooth - SPP, MAP, etc.) but see much more device, and even application interaction with the vehicle. For example, we are seeing TONS of use cases for Bluetooth SPP for command, control and content sharing between vehicles and devices. In some cases Tier 1s and OEMs are relying on things like SLIP connectivity over SPP. I think you will see carriers block this functionality (IMHO) so be careful here. The next step will be application and potentially display sharing. You see this with Nokia Terminal Mode and Apple's new IPod Out. What Apple did right and Nokia will have to address is how to handle application / content policy management to block video / display sharing of content deemed not fit while driving (distraction, etc.). Again, in this way a new nav application, or other feature / content, could be either created by an OEM for a popular device and pushed to the vehicle, (perhaps even downloaded from a devices application store) or the OEM could enable other application vendors to target the car through the device.

The Car

Device connectivity and application sharing will be one method of enhancing (and being enhanced by) the vehicle’s interior environment, but it won’t be the only way. Enabling devices in an appealing, while safe, way in a vehicle will still necessitate quite a bit of electronics in the vehicle: Large displays, high end graphics processors, high end CPUs, Operating Systems, Speech recognition software, etc. All of this will still be in the vehicle even if much of the end users application experiences are enabled through the use of “pocket applications”. OEMs have a vested interest in a consistent end user experience for certain applications across all devices, carriers and vehicle models. Some of these applications over time will shift from being brought into the vehicle to being a feature too important to leave out of the vehicle or to need to rely on you always carrying your (associated) device.

As a related aside, my wife is driving our vehicle right now to the zoo. She just called me at work because she couldn’t remember the correct freeway exit. I started to say use the off-board navigation, but that services is paired to my phone (with me) not hers. . . what a pain.

So back on topic: Another thing to highlight is that new business models will emerge that OEMs will be remiss to not consider. Take for instance the sheer data an OEM’s telematics systems can collect. There are already rumors in the industry about trades being negotiated between Google and OEMs for vehicle data. There might be instances where enabling local search, maps, navigation, the display in a car, etc. might have financial benefits for the OEM or providing opt in “probe data / crowd sourcing” could benefit a driver in some way. In many cases implementing key features or even updating electronics and software will potentially be paid for by these new business models. Also, many costs currently absorbed into the vehicles BOM will be able to be offset by revenue associated with new business models. For example, Blackberry traffic was announced last year. This traffic application will be provided for free and will provide both real-time and historical traffic information. Traffic is something that has a significant cost in OEM systems today.

The “Cloud”

Audi MMI with Google Earth

Lastly, as ubiquitous connectivity comes to the vehicle more content and services will be able to shift to the “cloud” and the car will have the potential to be an application platform in its own right. Apple’s acquisition of Lala, Webkit and HTML 5 adoption, Google’s server based Voice Search, Microsoft’s Office and Azure, OnLive’s gaming experience . . . Just little proof points that consumer and business technologies are moving to embrace cloud based connectivity. You will see this have a dramatic impact in automotive. Costs will be offset by:

•   removing large storage: used for map data, speech vocabulary, multimedia, . . .,
•  license costs for speech rec, map and navigation data and algorithms, points of interest . . .

In addition to cost savings new revenue potentials will be revealed.  Some potential examples:

• Geofenced advertising: “50% off pizza at Joes next exit”; “xyz, one of your favorite Pandora seed bands is playing a surprise show at the park up ahead”
• Traffic brought to you by _________
• Download the latest horn tone, or electric vehicle engine sound for $x

The real key in achieving the status as an application platform capable of driving an application and development community specifically targeting automotive will be rolling platform enabling electronics in all tiers of vehicles, enabling an open and consistent application environment and addressing the safety aspect of adding applications to a vehicle. OEMs under appreciate what potential they have for providing a large enough volume of devices to create an ideal platform for developers to target. Lets provide a bit of perspective. Apple has sold around 60 million iphones, since launch in 2007. I know my wife has owned 3 so not all of those phones are still in active use. Toyota ships in the neighborhood of 9 million cars per year. So in the same 3 year period you could have a very close volume of “active” “platforms” to target. Yes I am making some big leaps in this conclusion, but the point to make is that if a strategy is adopted to make an easy, open, rich, safe platform that can be inexpensive enough (or business models offset the cost) to launch into even low end vehicles cars themselves could have a rich development community of unique applications. And as more apps embrace the “cloud” HTML 5, Flash / AIR and other internet enabled technologies will touch the driver.

So what will the future of Infotainment be:  All of the above . . . likely at the same time. (/snip)

The New (Software) Tier 1

With regard to the automotive supply chain, what do you think of Microsoft, BSquare, Elektrobit, Apple, Google, and QNX? Traditionally, you would call these companies Tier 2 suppliers, meaning they supply services, support and technologies to the traditional Tier 1 suppliers — the Delphi, Visteon, Denso, Continental, etc’s of the world. Unless you have been living under a body control system (I didn’t think rock was appropriate), it should be very obvious that the interior electronic automotive supply chain is changing dramatically.

Take, for instance the role of Microsoft, Elektrobit, and Ford in the Sync project. Microsoft and Elektrobit really were the Tier 1 suppliers to Ford. For the next iteration it appears that Bsquare is the new Elektrobit in the mix. The “traditional” Tier 1 was quickly relegated to a contract manufacturer with a very small margin. Rumor has it that the Tier 1 could get bypassed altogether in future versions of Sync. According to this press release from Bsquare (http://www.bsquare.com/about/story.asp?PressID=507) “It used to be that auto makers went to companies like Continental, Delphi and Panasonics and ordered a component with a list of capabilities. "And a black box came back that fit in the dash," Crowley said. "Ford said, 'I'm going to break that cycle. I'm going to do this all myself.'"

What impact does this have to the industry in general? This new software tier 1 model has the potential to be challenging for traditional Tier1s, but also to OEMs given the automotive / economic doom and gloom. Why, you ask? Well obviously this new scenario may well impact traditional Tier 1s since now they are competing with the Flextronics of the world.

But for OEMs, at a time when cash conservation is critical, they are now paying for software up front rather than amortizing the software costs (Engineering, Tools, etc.) over a Tier 1’s piece price. Also, they no longer have such a strong buffer and share of risk for liability, warranty, indemnity (especially in the case of Linux investment), etc..

So what should be done? First, some misconceptions must be addressed. Tier 1 suppliers are, at heart, integrators and buffers for warranty, liability, etc. They are skilled not only in automotive lingo, but in the tough requirements and long term supply of the automotive market. I believe the complexity and cost of integration, version control, maintenance, updates, licensing, etc. are often under valued by car companies. As a result of this, IMHO, the new model of the software Tier 1 will have some growing pains before it matures. That being said, traditional Tier 1s need to embrace a more software-oriented skill set. Also, in the current economy, the temptation is to try to get more money up front from the OEMs. If your business can afford it, resist that urge and use it as a differentiator against this trend.

For OEMs, perhaps holding off a bit on the new world of Linux, Software Tier 1s and upfront investment (by you and your suppliers) in software is in order — at least until the economic situation improves. Let the early adopters of this strategy prove out the model (and risk) before wading in. It will allow you to manage cash in this critical time and keep your suppliers healthy. You know often they don’t just provide infotainment — you depend on them for quite a bit more.

Green is the new black . . . or at least the new strategy to get into the black

Recently a car company mentioned to me that every ounce of current draw in an electric vehicle is essentially "gas" and between the US Governments new focus (and stimulus) on alternative energy sources / improved mileage and potential car buyers still feeling the recent pain of $4 / gallon gas, the entire automotive supply chain is positioning, (or repositioning), themselves around “green” technology campaigns.

Take for example the recent announcements from Bose and Harman Becker around energy efficient audio and infotainment systems:

Bose Energy Efficient Series Automotive Sound System - “30% smaller, 40% lighter, 50% less energy . . .”
http://www.bose.com/controller?event=VIEW_STATIC_PAGE_EVENT&url=/automotive/innovations/energy_efficient_series/index.jsp

Harman Kardon® GreenEdgeTM based audio and infotainment systems – “meeting the needs of energy-conscious customers without compromising performance”
http://www.harman.com/press/general_press.aspx?st=

Not just tier 1 suppliers are promoting Green, but also traditional and upstart car manufacturers and even their respective governments. It is interesting to note that the leader of one of the world’s largest economies, California’s Governator, was not only at CeBit pitching Californian companies, but will be the Keynote speaker at the SAE (Society of Automotive Engineers) World Congress this April. Outside of promoting his legislative track record, such as his Global Warming Solutions Act of 2006 or his Hydrogen Highway and Million Solar Roofs Plan, I think Governor Schwarzenegger’s real agenda has the state economy in mind. California has the largest concentration of electric vehicle startups in the US and includes such well known names as Tesla, Fisker, Zap, Aptera (see video of my coworker beating on an Aptera car), etc. The theme to this years’ SAE World Congress: "Racing to Green Mobility"

Kerry smashing an Aptera EV

With the automotive industry currently experiencing the Autopocalypse (TM – ME) I believe the automotive supply chain is leveraging “Green” to get near term R&D and stimulus dollars while at the same time investing in innovation in order be on the leading wave of the recovery. My guess is that The Governator is the front man in California’s automotive strategy, positioning California as only he can:

California - “We’ll be Baak”

When a license is the "single point of failure"

Last week, at CeBit, I had the opportunity to witness the launch of the GenIVI consortium. Graham Smethurst, of BMW, did an excellent job summarizing the challenges facing automotive OEMs and Tier 1s that led to the creation of GenIVI. The theory is that you can plug-in any conforming middleware (speech rec, navigation engine, etc.) into the GenIVI framework. The ultimate goal of GenIVI being to create standard interfaces to reusable modules. I walked away struggling with only one point: his contention that everything in GenIVI was created to remove any "single point of failure".

The reason I struggled with this point was because of the use of a single OS, Linux, for GenIVI. While there might be many distributions of Linux they all share one thing in common the GNU Public License (GPL). If Linux is the only OS for GenIVI, then it stands to reason that GPL then becomes THE single point of failure. (see my thoughts on GPL in automotive)

If it were me, I would have built GenIVI on an industry standard API like POSIX rather than a specific OS. In this way even the OS licensing could be varietal (GPL, LGPL, BSD, etc.)