AUTOMOTIVE MULTIMEDIA AND COMMUNICATIONS

Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

October 14, 2014 01:28 rlanctot

Google is quietly calling the tune in automotive technology development. I see it every day.

Two companies have found success recently in bringing advanced vehicle technologies to the market on two very different trajectories. One, Quanergy, recently made public its relationship with Daimler as part of a plan to bring advanced safety technology to the market. The other, Making Virtual Solid (MVS), has acknowledged its relationship with Toyota for an advanced head-up display.

Quanergy has gone from concept to OEM deal within a year of obtaining its first funding. MVS has been banging away at its solution for nearly a decade laboring in the shadows while courting Tier 1s and OEMs seemingly to no avail.

The difference between the path to market for these two companies is Google. Google cares about advanced driver assist technologies. It does not appear to care about head-up displays.

I still remember meeting MVS company president, at the time, Myra Schulman, at an industry event many years ago and being perplexed and intrigued by the company’s name. I have since gotten to know Juliana Clegg who has been carrying the flag for the past five years or so.

The fact that Quanergy found a more rapid path to the market reflects the growing influence of Google. Quanergy’s Lidar-based system is intended to replace the $70,000 Velodyne unit made famous by the rig on top of the Google self-driving car.

Quanergy is driving down the size and cost of that system to about the size of a hockey puck and the cost of an iPad. In contrast, MVS has been slogging away at the significantly less sexy head-up display category but with a no less radical technological leap in packaging, cost and performance.

The MVS solution creates what is called a volumetric, 3D head-up display that will enable safer communication of navigational cues and safety alerts in the context of the visual field ahead of the vehicle. The cost and packaging of the MVS system could help bring the technology to vehicles outside of the upper reaches of the luxury segment to which they have been until-now confined.

 

But without any interest from Google in head-up displays, car makers regard the category with something less than enthusiasm, though companies such as Continental have continued to steadily advance HUD technology with multiple OEM partners. The fact that Toyota is the first to adopt the MVS solution is a head turner and should open some eyes.

Multiple use cases are illustrated in a Car and Driver report (http://tinyurl.com/ofo2um5 - Toyota Developing Radical Head-up Display for Production) including the description of how the display will alert drivers to hazardous driving circumstances. In fact, the Toyota adoption of the MVS technology may in itself change the perception of the technology and restore interest in non-Google initiatives.

Still, you can sense the venture capitalists weighing the merits of investing in emerging automotive technology suppliers against Google’s commitment to or interest in their technology. It is close to amazing that MVS has made it to market at all. When the car companies and their suppliers keep you waiting, it is tempting to lose heart even as you are losing money.  (MVS executives are quick to point out the fact that their efforts have been funded by multiple OEMs throughout the development cycle.)  It looks as if MVS’s patience has finally been rewarded. Maybe Google will take note.


October 11, 2014 10:07 rlanctot

Interview after interview, press briefing after press briefing, quote after quote, Mary Barra, GM’s CEO, neglects to mention the single asset at GM that held the greatest interest of potential investors or acquirers in the darkest days of GM’s bankruptcy: OnStar. Speaking years ago with Steven Rattner, so-called Car Czar and overseer of the bankruptcy, (and author of “Overhaul”) he told me the single asset that stimulated almost daily phone calls from interested parties during the bankruptcy was OnStar.

All that value, but not a peep from Barra. It is time for Ms. Barra to speak up and speak out about this core asset, OnStar, that is going to give GM an edge in the emerging Internet of Things economy.

OnStar is also the answer to what ails GM today.

To that end, the time has arrived for real, credible transformation at GM. It is time for GM to offer lifetime vehicle connectivity included in the cost of its cars.

In light of the horrific ignition switch recall (potentially having contributed to as many as 23 fatalities), it’s time for GM to take OnStar back into the limelight with a leadership stance in telematics. Lifetime connectivity for GM cars is the game changer the company needs.

Only an offer like lifetime connectivity will truly convince consumers that GM is serious about backing its quality, reliability and safety claims. Only lifetime connectivity will deliver the kind of signal to consumers that GM “gets it” – that it’s time for business NOT as usual. It’s time for change.

Based on subscribers alone, GM’s OnStar telematics service remains the industry leader. It is expanding that leadership position daily with the addition of geographic coverage in China and Mexico with more countries to come.

What GM has failed to do is to reposition OnStar in a post-smartphone era. What is required is a redefinition of the connected car value proposition including the definition of connected safety.

GM is making some long-term bets on vehicle-to-vehicle connectivity as well as on the self-driving precursor technology “Super-Cruise.” But the recall debacle has called painful attention to the fact that GM, of all car companies, is losing touch with its customers.

More than a million cars remain on the road with faulty switches. The ignition switch recall, along with so many others effecting millions of GM cars on the road, is illustrating the desperate need to switch gears.

It is time for GM to offer lifetime connectivity to OnStar customers. Yet even such a bold offer will only show GM playing catch up. Qoros and BYD in China already offer lifetime wireless connectivity and, in the U.S., Tesla appears so far to be committed to the same value proposition while BMW offers 10 years of "free" wireless service (included in the cost of the car).

Lifetime connectivity will ensure that GM:

  • Can find the cars (and their owners) that urgently require recall repairs
  • Can communicate service bulletins or the need for software updates (or directly deliver those software updates)
  • Schedule dealer visits in real-time to remediate any troubles

Note, that the value of lifetime connectivity is primarily directed at GM. It is valuable to GM to be connected to its customers. Customers benefit indirectly. But I am sure GM can cook up some revenue opportunities if all of its cars are connected all the time.

How about it GM? Are you ready for real change?


October 9, 2014 06:57 rlanctot

The following commentary was prepared by Stefan Engels, a German attorney and automotive industry consultant with previous senior executive experience at dbh logistics IT AG, Intermap Technologies, PTV AG, Motorola Solutions, Deutsche Telekom and DaimlerChrysler Services. (I edited Stefan's commentary and chose the picture - at left.):

Hardly a day passes when one cannot find a high profile commentary or news bulletin about autonomous or semi-autonomous vehicles. Next to the usual suspects in the automotive industry working on such technologies, there is a remarkable number of new players trying to penetrate this field. These newcomers obviously see market and technical opportunities within autonomous driving, but the law may be a bigger barrier than technology.

There are several unresolved legal questions, especially here in Germany and in Europe overall, which leave announcements like “XYZ cars/trucks will drive autonomously by 2020” sounding a little hollow. I am not opposed to the vision of self-driving cars, but the legal issues must be resolved.

Major recent change of the Vienna Convention on Road Traffic in 2014

A first step towards realizing this vision was made back on April 17 this year, when the good old international treaty called “Vienna Convention on Road Traffic” saw dramatic change in its Article 8 para. 1. Pushed mainly by representatives from Germany, Italy and France, the U.N. Working Party on Road Traffic Safety agreed to let drivers take their hands off the wheel of self-driving cars, as long as the system "can be overridden or switched off by the driver." In a nutshell: a driver must be present and able to take over the wheel at any time.

Years before, it had been both mandatory as well as common sense of the 1968 Convention on Road Traffic, that: "Every driver shall at all times be able to control his vehicle or to guide his animals." – which pushed the sophisticated dream of “without a driver having to touch the steering wheel” in Germany far out - as the German driving license regulations (FeV) refers to it.

The legal framework ruling operation & permitting of vehicles in Germany

There are a few regulations, mainly stipulated in the national German Road Vehicle (Registration) Regulations (StVG, StVZO and StVO), which still require active measures by any vehicle driver, regardless if the car is fully automated or not. So nearby scenarios in the big picture with a vehicle commuting driverless, e.g. to a parking space or as a pick-up service, require a change of these regulations, in order to conform to these laws.

For example, according to Sect. 31b StVZO, each vehicle driver has to hand out on request e.g. the breakdown triangle, the reflective vest or the first-aid kit. It is the literal sense that a driverless car cannot “hand out” anything at all. On the other hand, violators can be prosecuted with a fine of up to 2,000 €, according to Sect. 69a, para. 5, No. 4b in conjunction with Sect. 24 StVG.

A similar problem occurs when a vehicle breaks down: according to Sect. 15 StVO, the vehicle driver has then to arrange a breakdown triangle to warn oncoming traffic from behind, roughly in a total distance of 320ft. Minor offences can be punished here with a fine, but in the worst case, this can be sentenced as a criminal offence with prison up to 5 years (Sect. 315c, para. 1, No. 2g StGB [German Criminal Code]). Finally, absconding after a traffic accident (Sect. 142 StGB) showcases, that our legal system – not only in Germany – also takes a physical vehicle driver for granted!

Apart from that, there are numerous mainly technical regulations in the national German Road Vehicle Registration Regulation (StVZO), effecting the remaining general operating license of a vehicle, such as the grant of a view field, needed resolving power of camera systems, brake and steering mechanism – see e.g. Sect. 19 StVZO.

One may argue now, if you take Adaptive Cruise Control, Lane Departure Warning, a good automatic gearbox, multiple cameras and just add some (physical) sensors, you have an autonomous car that is quantifiably better than the average driver. Even though this may be the case, it is in my view the overall combined system that needs to perform smoothly and operate 100% error-free.

A well-known German OEM, for example, has driven hundreds of miles with its prototype. At a pedestrian crossing somewhere downtown, a polite old lady wanted to give way to this car. While the system detected an obstacle, identified as a pedestrian at the side of the road, the car stopped, to give way to the lady. No rule in the system had been programmed for “politeness,” and to me this is one of the more “innocent” errors, that can occur.

Liability issues

Next to a fault-based liability, there also exists liability regardless of fault in our national German Road Vehicle Regulations. According to Sect. 7 StVG, the keeper of a car is always held liable for any harm, caused by his vehicle: for injury to persons up to 5M€ max., for property damage up to 1M€ max., see Sect. 12 para. 1 No.1 and 2 StVG.

This is based on the idea, that each keeper of the car is responsible for the potentially increased risk, emanating from operating his or her vehicle. Therefore, each keeper of the car is obligated in Germany, to effect an insurance (see Sect. 1 PflVG) for (1) himself; (2) [a potentially non-identical] owner of the car as well as (3) the driver. In this context, questions will definitely arise regarding insurance protection, if the car is driverless, as to what exactly can and will be covered.

Next to this – as you have probably expected – also the producer can be held liable, if due to a product defect a person is injured or property damaged, see Sect. 1 para. 1 ProdHaftG. Again, this liability is regardless of an actual fault. In Germany, we differentiate three main “fault” case groups: (1) construction; (2) production and (3) instruction. Especially the latter one – instruction faults – is well-known, when it comes to more complex driver assistance systems and is the main reason why acoustical and/or visual warning signals have to be implemented here – next to the telephone-book-thick instruction manuals just for ADAS applications.

Outlook for Germany & the EU

Apart from Germany's Road Vehicle Regulations and product liabilities, data privacy protection will be one key area, that also needs to be covered. Hackers taking command of a car is not the sole concern. Which privacy law applies, if a German headquartered OEM, manufacturing a vehicle in a plant based in the US, sells it to a customer, who drives it then in Japan?

But with roughly 80% of all fatalities derived from human failure, I think we should seize this golden opportunity now and position technical demands for camera systems as a higher priority than any existing human reference values in our laws, in order to improve the whole, intrinsic system and lift it up to the next level.

Given the fact that some of the above mentioned laws are originally EU-directives, which have been implemented by all EU member states, it is not solely a German challenge to overcome.

In Conclusion

The German car lobby with support elsewhere in the EU was able to alter the Vienna Convention on Road Traffic to allow hands to be removed from the wheel. Mercedes was clearly mindful of the old rules when it launched the latest S Class requiring the driver’s hands to be on the wheel. (Of course, some clever drivers have found a workaround with a can tied to the steering wheel: http://tinyurl.com/obglrqd)

Hopefully progress in the future will not depend on workarounds. With further lobbying the Gordian Knot of legal limitations will be overcome enabling a driverless future to unfold. But it may be difficult for Germans, in particular, to accept that computers drive better than Germans.


September 23, 2014 14:38 rlanctot

With its $1B acquisition of Waze last year Google served notice that it understood the importance of crowd-sourced data to navigation and the connected car market.  The problem is that Google may not have realized how popular Waze really was or how that popularity might impact the automotive industry and Google’s own connected car plans.

I am visiting Brazil this week and the impact of Waze is being felt throughout the connected car market.  Car makers struggle to sell car radios, let along navigation systems or connected safety.  Consumers will have none of it when they can simply use Waze navigation, for free, on their smartphones.

In fact, public authorities in Rio de Janeiro used Waze (and Moovit) data to help manage traffic and transit activity during the World Cup, according to a report in Forbes:  http://tinyurl.com/lyhzmbo

A Yahoo report dating to June of last year estimates Waze users at 50M worldwide and its prevalence and continued penetration is impossible to ignore.  Regardless of the accuracy or timeliness of its probe-based traffic information, Waze has become the primary go-to source for traffic information throughout the developed and developing world.

But Waze’s success is smothering invention.  The leaders in traffic information – TomTom, HERE and INRIX – are focused on refining predictive models and routing engines.  Along with those efforts, these organizations are developing the means to report traffic for smaller and smaller road segments with greater degrees of accuracy and integrating state of the art journalistic or observational inputs.

Waze pretty much focuses on delivering timely probe data feeds via a customer-pleasing user interface and “gamefied” user experience.  If Waze offers any traffic predictions they are based on historical data, but Waze was not founded upon traffic prediction, it was founded upon real-time traffic reporting.

So, Waze is essentially delivering the anti-Wayne-Gretzky traffic reporting experience.  Rather than helping users understand where the puck is going or where the puck (traffic) will be when the driver gets there – Waze focuses on what the traffic is.

But this approach to traffic reporting is not unlike the weatherman looking out the window – or looking at historical weather reports.  We all know that that is not how forecasting is done.

I do want to note that Waze is also a powerful go to source for traffic cameras, or “fiscalização electronica” here in Brazil.  This is one way that crowdsourcing is delivering a powerful value proposition for drivers.

But there is a more insidious negative impact from Waze that is just as impossible to ignore as its global real-time traffic reporting success.  Waze is becoming the default choice for smartphone based navigation in emerging markets around the world.

The impact of this emerging and proliferating consumer preference is to suppress interest in embedded navigation systems, no matter how inexpensive they might be.  Waze has become that bugaboo of the navigation and traffic industry:  the good enough solution.

It takes too much time to explain to consumers why systems from HERE, TomTom and INRIX are superior.  Waze is free!  Is that bad?

Waze is bad.  It’s bad for embedded navigation.  It’s bad for integrated safety and location-enhanced powertrain systems.  It’s bad for Google.

Waze’s emergence in the developing world – as in Brazil – has contributed to consumer indifference toward embedded (in-dash) navigation.  This is unfortunate because adoption rates for embedded navigation outside the developing world are on the rise.

The reason for wider adoption of embedded navigation is the enhancement of fuel efficient driving and safety systems.   Cars being sold in North America and Europe are increasingly integrating map data with safety systems for contextual awareness and autonomous driving, and powertrains for enhanced fuel efficiency.

The ever-widening spread of Waze means embedded navigation is struggling to take hold.  This is especially worrisome in Brazil and China and India where enhanced situational awareness and safety systems are sorely missed as part of the effort to mitigate skyrocketing highway accident fatality rates.  (Could Waze users be responsible for killing people and trees?)

Even more unsettling for Google is the fact that Waze’s popularity is a barrier to the success of the Android Auto smartphone connection offering from Google arriving later this year.  Android Auto will be an expensive platform for integrating Android-based phones in cars.  While it will enable an embedded screen-based navigation experience, it will represent a prohibitively expensive alternative to the Waze user accustomed to using his unencumbered phone.

Even integrating Waze into the Android Auto solution will not reduce the cost of the system.

Waze is discouraging the adoption of embedded navigation which is impeding the integration of on-board map data with safety and powertrain systems.  Waze is also standing in the path of Android Auto.

All that being said, Google is driving the adoption of Waze by municipal authorities, as in the case of Rio de Janeiro, and broadcasters, with mixed success.  Here, too, Google is discovering the tragic truth of traffic data – no one wants to pay for it! 

That is a slight overstatement of the facts.  Consumers and car companies do not want to pay for traffic data, but municipal and government authorities are willing to pay and there is a long history of broadcast organizations paying for traffic information.

Government organizations do prefer accurate traffic data and predictive models, but there are some applications for which real-time info is sufficient.  Even broadcasters may be content with real-time traffic information.  But here, too, Waze’s good enough solution may undermine the delivery of more accurate and timely traffic solutions and travel time estimates   .

Has Waze become the crack of the traffic industry?  Or is Waze a gateway application to something more serious?  This remains to be seen.  For now, Waze is good enough to get the masses around.  And it’s proving increasingly difficult to get consumers to see past the Waze.  That sounds good for Google, but it is really bad.


September 17, 2014 15:17 rlanctot

There is a maxim in the publicity business that it doesn’t matter what anyone says about you as long as they spell your name right. In other words, all publicity is good publicity. There is good reason to believe that maxim when, for example, GM sets sales records in spite of record-setting recalls.

But there are times when you have to step in and set the record straight. General Motors, above all other car makers, knows this well. No other car maker attracts wanted and unwanted press attention like GM and with so much attention attracted there are inevitable moments of cluelessness on the part of the press, in spite of best intentions.

These moments of cluelessness are magnified by the introduction of technology. Last week it was GigaOM caught in the headlights with an inaccurate story about the alleged demise of Chevrolet’s MyLink smartphone connectivity system (along with, presumably, Buick’s IntelliLink and Cadillac’s CUE).

The GigaOM report appeared to be based on an interview with Mary Chan, who doesn’t give a lot of interviews. It was picked up by VentureBeat and others. Mary was no doubt hoping to clear the air and give GigaOM a small scale scoop regarding Apple CarPlay and Google Auto Link implementation. GigaOM took the small scale scoop and inflated it into a large scale fabrication.

Here is the GigaOM article: http://tinyurl.com/n7rtrub

Here is the GM clarification:

1.) GM is not getting rid of MyLink. MyLink is the name of Chevrolet’s infotainment system (Cadillac’s is CUE and Buick/GMC is IntelliLink). So, all the connected radio and infotainment features we offer within Chevrolet vehicles are part of the MyLink platform. When the day comes that we do implement Apple Car Play or Android Auto, those would be offerings within the MyLink platform too. Articles and/or headlines that state we are abandoning or disinvesting in MyLink are not accurate.

2.) While we are committed to working with Apple and Google to implement their respective phone projection systems, this won’t be customers’ only option for information and entertainment services within the vehicle. We see CarPlay and Android Auto is another option for customers to get the services they want within vehicles, but we will also continue to offer a variety of built-in infotainment features as well. GM is implementing a strategy of both built-in and brought-in connectivity in order to give customers their preferred method of accessing information.

3.) General Motors remains committed to bringing the AppShop (CUE Collection in Cadillacs) to market in the future as part of an overarching connectivity strategy. The decision to delay this feature beyond the 2015 model year was based on the company’s commitment to ensure all infotainment systems deliver the highest quality and best user experience to our customers. Development work is ongoing. However, at this time we have no specific timing to announce.

To paraphrase Mark Twain, rumors of MyLink’s demise have been greatly exaggerated.

Writing about tech is hard. But that's why you can make a good living at it if you can do it well. We now know what happens when you don't do it well. Now let's all get back to work.


September 13, 2014 10:06 rlanctot

Nearly a year after its much-touted IPO failed to launch, INRIX has announced that the Porsche family, majority shareholders for Volkswagen AG, are investing $55M for a 10% stake – putting INRIX’s market value at approximately $550M. That value is about half the purported $1B valuation that would have resulted from the company’s original planned IPO.

The investment is a proud moment for INRIX which is battling for survival in a traffic market fought over by Google/Waze, Nokia/HERE and TomTom along with a host of other regional traffic data information providers and various startups. Ever since Waze scored about $1B from Google, entrepreneurs have been battling to find the next Waze-like solution along with Waze-like valuations.

In that respect, the INRIX investment by Porsche though inducing a huge sigh of relief at the Seattle-based company, did not inspire the wider investment community.

The hard truth is that although traffic data may be, in my estimation, the single most important telematics application, the car makers who hold the keys to the market see traffic data as nothing much more than a source of cost. The problem results from the poor quality of early traffic data feeds and the inability of car makers to charge for the same traffic data for which they had to pay – with the exception of SiriusXM and Ford, both of which have subscription-based traffic services.

Google simultaneously put a high value on traffic with the acquisition of Waze and zeroed out that value by giving the service it away. TomTom, INRIX and HERE have soldiered on, enhancing their data feeds and refining their algorithms and securing strategic relationships and contracts.

The potential upside lies in the proliferation of embedded connections in cars. Connected cars are expected to produce valuable probe data and other potential traffic information enhancements capable of delivering forward leaps in performance and customer interest.

The INRIX funding arrives in the heat of a swirl of market speculation regarding acquisitions and partnerships. Samsung was recently rumored to have proffered a $7B bid for Nuance – an acquisition that would have solidified Samsung’s presence in the elusive automotive market.

The Samsung rumor revealed the two-tier nature of the M&A world. As an acquisition candidate you are either a $1B-or-less target (Hughes, Agero, Octo) or a $10B target (Nuance). Of course, there is a third class of <$100M deals (Cobra, Tweddle Connect).

The more fanciful rumors around INRIX had the company either getting a strategic investment from Samsung or getting probe data from Samsung (handsets). Just as in the case of Nuance, an INRIX relationship would have burnished Samsung’s automotive cred, but Samsung clearly faces bigger existential challenges beyond automotive credibility as it experiences pressure from emerging Asian handset rivals.

INRIX may be disappointed in a $550M valuation relative to its original $1B target. The good news is the investment buys the company more time to reinforce its traffic products and services portfolio as it seeks to expand the scope of its service delivery proposition.

Early INRIX investors who were bought out in the Porsche deal are probably sleeping well now. But given the increasing competitive pressure to deliver a Waze-like exit there will be no rest for INRIX employees.


September 8, 2014 14:03 rlanctot

Governments around the world are increasingly obsessed with mandating hardware devices to be built into or attached to cars. If this keeps up, cars are going to start looking like barnacled old whales.

Devices add cost and weight and, in some instances, vastly disrupt supply chains, design cycles and research and development programs. Europe’s eCall and Brazil’s Contran 245 mandates are but two examples of a series of initiatives conceived with the best of intentions that have cost car makers and their suppliers millions of dollars to no purpose.

In Europe, eCall was intended as an automatic crash notification system for alerting emergency responders to accidents. Its implementation was meant to save lives, with some estimates running as high as 2,000 saved lives per year.

Instead, the entire time and money wasting process of defining and adopting eCall has most likely cost lives as the mandate process disrupted car makers’ own plans for ACN systems. After a decade of research, development, standards setting, testing and missed deadlines, the prospect of the first saved life is still years away.

In Brazil, Contran 245 is on a similar trajectory of study and delay. The mandated module intended for tracking and immobilization of stolen vehicles of all types was given yet another delay earlier this year of two years. No cars, trucks or motorcycles have been rescued from theft yet and are not likely to be for another three years.

In spite of the millions of wasted dollars (Reals) and development in Brazil, the Contran 245 program has been successful in two ways. It has attracted significant investment to the rapidly growing Brazilian automotive market (including acquisitions such as Michelin’s purchase of Sascar); and the battle to control the market for embedded modules helped drive down the cost of connectivity hardware globally.

But the ongoing delays in Brazil highlight the shortcomings of the government mandate process. Two years ago, after multiple delays in adoption of the Contran 245 mandate, suppliers notified car companies that they would have to either buy up all the telecom modules that they estimated they would need or they would have to redesign their connectivity devices.

What happened in Brazil was that the delay was so long that suppliers were no longer making the relevant devices. This is happening in Europe as well where eCall was conceived for 2G networks which are now slowly but surely being switched off on the periphery of Europe and which, by the time of implementation, may no longer make sense for an emergency response system.

In an excellent, if a little long, presentation at Insurance Telematics in Chicago last week Cyril Zeller, vice president of global telematics for module maker Telit, detailed the growing roster of mandated vehicle connectivity programs. His list included:

BJ Tolling Auto – 2013 – Netherlands

eCall – 2017 – Europe

Era Glonass – 2015 – Russia

Denatran (Contran 245) – 2016 - Brazil

Monti’s Law – 2012 – Italy

Green Tax – 2013/15 – France/Europe

The U.S. is currently considering mandating a hardware module to enable vehicle-to-vehicle communication. And even the United Nations is considering a global eCall implementation scheme.

Modules for taxation are also in the mix throughout the world. The emergence of alternative fuel vehicles is threatening the gas tax-based highway infrastructure maintenance funding process in the U.S. Individual states led by Oregon are trialing mileage-based taxing schemes managed by installed modules. Even the U.S. Congress has taken up this possibility.

It is increasingly clear that something has got to give. The process of mandating modules is inevitably undermined by the pace of technological advance and market forces. Mandated devices predictably cost millions of dollars to standardize, prototype, test and adopt and invariably end up costing consumers and compromising the integrity and security of the vehicles upon which they are installed.

This week we learn of General Motors’ plans to deploy V2V modules on the 2017 Cadillac CTS. Yet even as it announces its intention to add these devices to these cars, GM acknowledges they will offer little or no value to consumers.

A technology with no proven consumer value would never have been added to a vehicle at the “Old GM” where pennies were pinched. GM’s decision to implement V2V is clearly political, not practical. GM is attempting to both lead the industry and score points with an unhappy regulator: NHTSA. There is no other explanation for adding worthless cost and weight to an already expensive car.

The common thread to most future vehicle connections, with the exception of some RF-based tolling devices, is the telecom module. Regulators obsessed with mandates and modules will be better served by seeking to fit their connectivity requirements – protocols, codes, algorithms, prioritization schemes – into existing wireless standards development activities. For cars, this means focusing on 5G.

By using existing wireless standards regulators will allow consumers to fulfill the connectivity requirements with inexpensive aftermarket devices or their own wireless phones or via embedded telecom modules already built into their cars. Cars like whales are better off unbarnacled.


September 4, 2014 15:43 rlanctot

When companies spend millions of dollars on advertising you assume that they know what they are doing. But I can honestly say that Progressive has lost the thread when it comes to promoting its SnapShot usage-based insurance program on TV.

The SnapShot ads, such as the “peer pressure” campaign pictured, invariably reinforce negative connotations attached to both insurance companies generally and tracking devices particularly. The peer-pressure campaign – which features Progressive’s lovable “Flo” character trying to tempt some teens with a SnapShot device from the shadows outside a convenience store as if it were an illicit drug – follows the “rate suckers” campaign and others.

What is Progressive thinking? Isn’t it enough that Progressive has extracted as much value out of the now-ancient SnapShot campaign as it possibly could? Now the company has to put a negative spin on SnapShot? If there is some sort of irony afoot in the peer pressure ads – it’s-bad-but-it’s-good-for-you? forbidden fruit? – I am missing it and I submit that I am not alone.

The real problem for the industry generally and for Progressive and usage-based insurance in particular is that SnapShot has been conceived – after nearly a decade of testing and prototyping – as a low cost solution intended to deliver lower cost insurance to consumers. Put in that way SnapShot can be seen as a reasonably successful proposition.

But SnapShot was intended as a means to lure customers away from other insurers. This was somewhat successful, but ultimately Progressive had to let its own customers in, thereby muddying the broader corporate goal.

SnapShot was meant to bring in attractive risk prospects – after all, they’d be tested first with SnapShot to determine their eligibility – drawing in the best customers of competing insurers in an otherwise mature marketplace. Selling SnapShot to existing Progressive customers means spending money to give your existing customers additional discounts.

This is assuming that we all buy into the fact that the discounts are actual real discounts from some baseline pool. Industry transparency being what it is, we will simply have to accept that assumption.

The good news and bad news regarding SnapShot is that it has been sufficiently successful to be the envy of the industry, but not successful enough to remove the taint of tracking and privacy violation from the overall usage-based insurance proposition. And, by failing to remove that taint, Progressive may be the greatest single obstacle to UBI becoming a mass-market phenomenon.

More importantly, as a low-cost business model and customer solution, SnapShot eschews any and all value adds from enhanced customer engagement. This reinforces the structural impediments in the industry which influence the all-important broker community, few representatives of which have given an unmitigated embrace to UBI.

The SnapShot device is only installed on the customer’s vehicle for six months and then it is sent back to Progressive. So the device is the equivalent of a risk assessment dipstick with no long-term value proposition for the customer. And it is a tough sell in mass media advertising, because not all customers will qualify.

The shortcomings of the Progressive approach are brought home at this week’s Insurance Telematics event in Chicago where a wide array of smartphone-based solutions and mobile apps are on display for educating consumers on how to improve their driving and thereby lower their insurance rates along with interpreting vehicle data for service memos and repairs. By turning its back on value add, Progressive’s industry leadership threatens to drive UBI insurance into a ditch.

In contrast to the negative advertising messages broadcast across the U.S. by Progressive, dozens of competitors are bringing clever new solutions and systems to the market intended to enable data portability (from insurer to insurer) and even smartphone-based enhancements such as emergency crash notification. A few companies stand out and are worthy of mention including: Driveway, DriveFactor, Baselinetelematics, Zubie and Agero. (There are many more - forgive me for not naming all.)

Some, like Driveway, are taking the pains to demonstrate that smartphone-based data is as good as or better than data extracted from an OBDII plug-in device – as is used by Progressive. Others, like Baselinetelematics, are showing how vehicle data – along with historical service and warranty information – can be used to create a more holistic customer relationship.

OBDII devices are under fire this year in light of the recent American Family Insurance recall of its own OBDII device (http://tinyurl.com/kd5ulzv Car insurance company recalls monitoring device). But most think the recall was an over-reaction and that OBDII devices, properly configured and deployed, are working and will continue to work well for consumers and the industry.

As for Flo lurking in the shadows tossing OBDII devices to teens? Progressive needs to get with the flow. The insurance industry is on a trajectory toward universal application of UBI underwriting. We won’t achieve this objective with negative messages.


August 27, 2014 20:43 rlanctot

News that GM was “deleting” (in industry jargon) HD Radio from the 2015 Impala had radio industry executives concocting a variety of conspiracy theories this week.  It is the vogue in the broadcast industry to predict the demise of the in-dash radio.  Each turn of the knob becomes yet another indicator of the end of the radio world as we know it.

The real news flash from the HD Radio end of the dial is that just as many new GM “platforms” are adding HD Radio as are dropping – so the net is no change and the long-term outlook is for continued broad-based deployment.  But the news of the tweak in availability for the Impala highlights a bigger issue playing out in increasingly digital dashboards: access to traffic information.

The most readily available, and usually free, traffic information service is the one accessible via the broadcast signal – the radio.  Car radios deliver traffic information via broadcast announcers sharing the observations of spotters and government supported data feeds, and via side-band or digital signals (RDS-TMC/analog or T-PEG/digital).

In North America, the means of delivering traffic information includes digital and analog broadcast signals (the car radio), SiriusXM satellite radio (subscription based and using existing radio hardware) and IP-based delivery (via an embedded modem or connected smartphone).  Aside from the satellite delivery, the same communication channels are available in Europe and other overseas markets.

Examples of IP-delivered traffic include apps such as Waze or INRIX, along with a host of others including HERE and Beat the Traffic and Google.  In fact, the lack of digital radio channels – as in the case of Europe – has caused automakers such as Audi to send the T-PEG traffic information (which is too large for the analog channel) via embedded cellular connections.

This is where things get confusing.  For a car company such as GM, the suspicion is that if the 2015 Impala is going to lose HD Radio, then GM’s plan must be to push streaming audio over the embedded Gen 10 OnStar LTE modem.  But it is unlikely that this was the intention behind the HD Radio deletion.

Still, the decision shines a light on a challenge facing the industry globally.  Multiple channels for the delivery of traffic information are available – including multiple choices in most cars.

A driver of a GM vehicle can listen to the local broadcast traffic report, or switch to subscription-based SiriusXM’s NavTraffic service and see the traffic visualized on the in-dash navigation map, or listen to the broadcast traffic feed on the appropriate SiriusXM channel corresponding to the local market (which may not correlate to the NavTraffic information.) 

HD Radio is capable of delivering yet another source of traffic information based on the T-PEG standard, though GM has not implemented this capability yet.  This traffic information is capable of enhancing on-board navigation and route guidance.

GM is in the process of introducing yet another traffic option, either from INRIX or TrafficCast, both of which are vying to deliver an IP-based traffic feed capable of integrating GM probe data.  And, finally, should GM successfully implement Apple’s CarPlay or Google’s Android Auto smartphone integrations there will be yet another source of traffic information.

Navigation supplier Telenav is also in the mix at GM and Telenav works with both TomTom and INRIX traffic information sources.  In the end, the least common traffic denominator in GM vehicles is most likely XM NavTraffic - available on Cadillac, GMC and Chevrolet vehicles.  But changes may be coming to GM.

GM is not alone in confronting an embarrassment of traffic information riches.  And since traffic is the single most important telematics application, it seems wise that GM do its best to determine whether it wants to deliver traffic information for free via analog or digital radio signals, via subscription (SiriusXM), or via the embedded modem or connected smartphones – or all of the above.

GM may be tempted, like other OEMs, to continue to offer all options and let the customer decide.  But the embedded modem offers the advantage of two-way transmission – with the car sharing its location Waze-like and thereby enhancing the accuracy of the traffic info – assuming the owner of the car opts into sharing his or her location.

Free traffic information via the radio is an appealing and near-universal value proposition that we all take for granted.  Subscription-based services and IP-based traffic feeds are compelling, but they can also be expensive and complicated to use.

Is GM’s dialing back on HD Radio a precursor to doing away with the AM/FM dial altogether?  Not likely.  Does GM and every other OEM have some tough decisions to make regarding traffic information strategy.  Definitely.  If I were dialing in my traffic strategy, the last thing I’d do is delete an information resource that was more or less free of charge.


August 22, 2014 13:16 rlanctot

So says Dick the Butcher in Shakespeare’s Henry the Sixth, Part 2.

U.S. Senator Claire McCaskill of Missouri might have been expressing similar sentiments when she incredulously inquired as to how GM Executive Vice President and Lead Counsel Michael Millikin and Lucy Clark Doughtery, Lead Counsel for North America, had kept their jobs in the wake of GM's recent and ongoing ignition switch recall debacle. “In the aftermath of (the Valukas) report, how in the world did Michael Millikin keep his job?” McCaskill asked GM CEO Mary Barra.

It is a stunning reversal for GM’s legal department, which was once led by Harry Pearce, who is still remembered for his forensic takedown of NBC’s Dateline expose of GM pickup truck fires in the early ‘90’s. Pearce led a team that revealed the embarrassing pickup truck fire videos to have been created by the use of incendiary devices planted by NBC technicians. NBC subsequently apologized for the misleading broadcast. Pearce’s work was a huge and desperately needed morale boost for GM at the time.

Pearce is also remembered for having led the charge to implement GM’s Project Beacon, which ultimately gave the industry OnStar. It was Pearce’s voice that won the debate as to whether to move forward with OnStar.

While Pearce established his reputation as a product liability litigator defending corporations such as GM, he is remembered at GM for both the Dateline episode and his contribution to OnStar’s adoption. Today, GM’s attorneys and those of many other car makers are more likely to be found wringing their hands standing in the path of new technology deployment rather than greasing the skids.

Liability, privacy, safety and security are the pillars of legal resistance to technological progress in the automotive industry. Rather than stepping forward to show the way to overcome these obstacles, OEM legal teams are more focused on fleeing from responsibility and ducking moral obligations.

The latest pothole on the road to progress is software over the air updates. Legal eagles at OEMs refuse to bless OTA technology until someone in the organization can guarantee that all software updates will occur reliably and verifiably at the highest level of confidence. Rather than accepting 99% levels of confidence, these barristers would see 0% adoption to avoid the fallout from the 1% of potential failure.

Let’s turn back the clock to GM’s deliberations over the adoption of OnStar. Here is the account of OnStar’s first president, Chet Huber, from his book “Detour:”

“In one of the ‘chock full o’ lawyers’ meetings that was supposed to finally be the end to the project, Harry listened patiently to all of the arguments about why this was such a bad idea. There really wasn’t much dissension, aside from Ken’s (Enborg) loud and vocal defense. Otherwise, it was more like a feeding frenzy, with numerous one-upmanship examples that all seemed to end the same way – with us somehow causing a car full of nuns to get stuck on some railroad track and get wiped out by a speeding train.

"When they’d all exhausted themselves, which takes a while with lawyers showing off for their boss, Harry finally spoke up. He asked the room a question: ‘If one hundred cars crash and they don’t have something like OnStar on board, how many of them will call for help?’ It was quiet. Then he asked, ‘Now, how many out of a hundred OnStar-equipped cars that crash will need to call for help before we’d be more wrong for holding back a potentially lifesaving technology like this than we would be for putting it in?’… This was an early example of Harry helping to define what ‘doing the right thing’ looked like at OnStar.”

GM, and by extension the entire automotive industry, needs a few dozen Harry Pearce’s – lawyers who will speed the adoption of new technologies rather than providing legal cover for avoiding innovation. Over-the-air software updates, autonomous vehicles, long-range electric cars, smartphone integration, advanced safety systems, telematics – all of these technologies face legal barriers to wider adoption and exploitation and each of these technologies has the ability to save lives or save the environment.

Sometimes looking out for the best interests of your employer means confronting inconvenient opportunities and clearing the way for progress. I can't believe that Tesla and Google don't employ their own legal teams. Maybe superior legal advice is the true secret sauce behind the auto industry's exposed Silicon Valley flank.