Where some see nothing but travail, others see opportunity. TomTom is among those in the latter group. As both TomTom and chief rival Garmin, in their recent earnings reports, admitted to flattening sales of standalone PNDs, the two have set out on divergent strategies.

 

For Garmin, the strategy is diversification emphasizing marine, aviation and outdoor recreation. TomTom, on the other hand, like an embattled ship captain at sea, is turning towards enemy fire – narrowing its focus on providing the best navigation/routing/traffic solution with connectivity as a wild card. In spite of the brilliance of its European strategy, though, the U.S. remains an Achilles heel for TomTom.

 

This week TomTom clarified its plans to implement a new open platform and push its connected device strategy. TomTom’s approach is not without risk, but no one can fault the company for being bold. When Google is breathing down your neck it is certainly time to be bold.

 

The cornerstone of the company’s new strategy is a reduction in the monthly fee for TomTom’s HD Traffic subscriptions from 9.95 Euro/month to 5 Euro/month. But there is much more to the campaign than a simple price cut.

 

First of all, TomTom is able to adjust its pricing because of a new deal with Vodafone. Where Vodafone had a revenue share in the past, it now receives a flat fee from TomTom. While the revenue share may have been satisfactory – as TomTom recruited 700,000 Live Service subscribers – the thinking is that the flat fee will make more sense for both parties as TomTom engages in a broad PND/navi connectivity campaign.

 

As part of the new campaign, purchasers of TomTom connected PNDs – beginning early in June (in Europe) -  will get a full year of free access to HD Traffic data. After that first free year, customers can subscribe at 5 Euro/month or annually for 49.99, a 10 Euro savings on the monthly subscription.

 

TomTom’s objective in launching this program is to increase the purchasing percentage of connected devices from 40% in 2010 to 60% in 2011 and 80% in 2012. Given the fact that the average PND/navi – by TomTom estimates – lasts 3-4 years before replacement, the company expects that 90% of its customers could be connected by 2014.

 

By TomTom’s estimates, that means a user population of more than 25M units reporting GPS probe data for traffic analysis on top of the existing Vodafone cellular hand-off data. TomTom and Strategy Analytics are certainly in agreement on a few things, chief among which is that traffic data is the single most important data element to navigation device users.

 

This analyst believes that TomTom’s HD Traffic is the industry standard for accurate traffic data. TomTom, not surprisingly, also believes this to be true and is expanding the scope of HD Traffic data to 16 European countries from 7, although the timeframe is unclear. Live Services will also be offered to a wider base of 14 European countries.

TomTom is a little unclear on which countries will get HD Traffic or Live Services and when. The company actually has a total of 30 countries set for Live Services launch within the next 12 months, 17 of which are expected to get HD Traffic.

 

Clearly, HD Traffic has become a key to TomTom’s strategy. It is a critical differentiator. But TomTom recognizes that competitors are working aggressively to integrate both their own cellular hand-off data inputs and GPS probe data. The new TomTom strategy appears to be targeted at cementing the company’s existing traffic leadership position ahead of the arrival of competitors.

 

TomTom’s Vodafone relationship is unique “force multiplier” for TomTom. The hand-off data not only gives TomTom an industry-leading traffic solution, it also opens doors to logistics business opportunities such as billboard, cell tower and store location and municipal and regional traffic management.

 

But TomTom’s ability to extend this advantage to the U.S. has run into intransigent U.S. carriers and existing players – AirSage and IntelliOne – that have already negotiated their own access to cellular hand-off data. This impasse is evidenced in the TomTom product plan which includes devices with “local” and “Euro-wide” data, but only a handful of models that merit a mention of U.S. data.

 

TomTom says its new campaign will eschew “ultra-low margin” products and price points and focus on mid-high segment products targeted at replacement buyers. The strategy appears to be an acknowledgement of two key issues:

 

#1 – PND/navi buyers are a unique breed and prone to replacement purchases. TomTom claims a high customer loyalty rate (80%) and clearly wants to win over Garmin customers.

#2 – Most of the growth in navigation is coming from mobile/smartphone and embedded navigation customers.

 

Which brings us to the final “fly-in-the-ointment” for TomTom. TomTom’s own market survey’s show traffic as the single most popular application for navigation customers, a finding corroborated by Strategy Analytics studies. TomTom also acknowledges in its own research that Google Search is the second most popular application.

 

While TomTom has opened up its platform – via its implementation of the Webkit OS – and plans to open an application store, the company will eventually have to reckon with Google. TomTom has no answer to the bottomless pit of POI data resident within Google.

 

TomTom’s community-based approach to map updates and POI data is a powerful answer to the strategies of OpenStreetMaps and Waze. But unless TomTom can find a POI or search partner to counter Google its bold new marketing campaign may come to naught.

 

Additional insights:

http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel - Navigation and Location Opportunities http://bit.ly/aoQdpd - North America Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel – Wireless Media Strategies http://bit.ly/aHhWeV - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel - Wireless Media Strategies http://bit.ly/cc6O9K - PND Owners Unlikely to Discontinue Using Their Device - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c5f65I - Automotive and Portable Navigation Market Forecast 2008-2016 - Joanne Blight - Automotive Multimedia and Communications Systems http://bit.ly/b5W8ZS - Nokia and RIM Push Into Automotive as ‘Apps’ Competition Mounts - Joanne Blight - Automotive Multimedia and Communications Systems http://bit.ly/9NoM13 - From Probes to Crowd to Community to Ads – Traffic Data Evolving Rapidly - Roger Lanctot - blog - Global Automotive Practice

Among the many untold stories in the telematics industry, the tale of Volvo OnCall and Orbcomm stands out, especially in the context of this week’s SISTER workshop on satellite communications and intelligent transport technologies, which took place in Brussels. What might, for Volvo, have become a visionary hybrid implementation of satellite and cellular technology for a telematics system for the U.S. market was undone by Orbcomm’s bankruptcy filing in 2000.   In retrospect, it is both understandable and deeply disappointing that no other automotive telematics planner chose to follow the Volvo path. Maybe decision makers saw the Volvo experience as a cautionary tale instead of as the inspiration that it actually represented.   Maybe if the European Union had taken a closer look at what Volvo was dreaming up they might have included satellite technology in their eCall plans. Alas, the EU did not include satellite technology in eCall which may be why the SISTER initiative was founded as the first association with the mandate to evaluate the possibility of integrating satellite technology to enhance the complete range of ITS technologies including eCall, road user charging, map updating, dangerous goods monitoring and enhanced Galileo services. SISTER concludes its research activities and will publish its recommendations next month.   Back in the mid-1990’s, Volvo was considering the inclusion of Orbcomm’s low-earth orbit satellites as a backup communication channel to cellular TDMA and Amps technologies. The company was willing to include satellite in spite of the obtrusiveness of the required antenna technology of the time.   Today, Volvo offers cellular-only telematics throughout Europe with short-term plans for a U.S. launch of a similar system. Orbcomm, meanwhile, has recovered and is a supplier of telematics technology to Volvo Trucks under the Dynafleet brand. Orbcomm is in fact a leader in the modest but growing hybrid – satellite-cellular - connectivity business.   The absence of satellite technology from existing automotive telematics solutions, especially for emergency applications, is extraordinary given the purpose of such systems. The EU regularly makes inflated claims of the life-saving ability of eCall systems to summon assistance from emergency responders. Chief critics of eCall are quick to point out that passing motorists frequently make the first reports of accidents rendering eCall messages redundant.   Where eCall could have an impact, though, is in the event of accidents occurring in rural areas, where cellular coverage is wanting. In fact, some say that the most severe accidents and injuries often occur in these circumstances. This is obviously where satellite technology could make a difference.   The good news is that the EU is finally looking at the integration of satellite technology at least as an idea, if not as part of the existing eCall specification. Even better news lies in the fact that this consideration is taking place after the demise of Worldspace and following the allocation of spectrum for DVB-SH satellite technology. The SISTER program is also taking place at the very onset of the European Galileo system which has direct application for all location-related ITS applications. In fact, satellite navigation is the most widespread of current satellite applications and is expected to lead the way in satellite integration into a wider range of services. The arrival of Galileo promises to deliver better than 10cm location accuracy potentially suitable for road pricing and lane keeping applications and possibly for map updating. SISTER workshop representatives foresee $43B in cumulative financial benefits - combined revenue and savings - from the integration of enhanced satellite navigation technology. Potential sources of these gains include: fuel consumption reduction, travel time reduction, air pollution reduction, CO2 emission reduction, cost savings due to congestion reduction and cost savings from decreased injuries. Current satellite technologies available in Europe, and elsewhere around the world, offer both superior location information delivery but also the ability to deliver audio and video content. Outside of Volvo, the only other company to foresee the arrival of this value proposition was Hughes Telematics.   Hughes proposed a hybrid satellite-cellular telematics system nearly five years ago that not-coincidentally included a DVB-SH component originally to be provided by Ico Global Communications. These plans were interrupted, at least in part, by Ico’s filing for bankruptcy. (Sound familiar?)   Nevertheless, the Hughes vision called for a consumer-targeted telematics system integrating emergency response, roadside assistance and concierge services along with entertainment content delivery. In fact, Ico was making its own plans to introduce aftermarket and portable devices for audio and video content. Ico has two DVB-SH competitors in the U.S., TerreStar and SkyTerra, both of whom will eventually be in position to offer the same telematics and infotainment solutions envisioned by Ico. Like Ico, TerreStar has a satellite deployed and in its final phase of testing. The large TerreStar satellite - which allows for smaller footprint device antennas - is capable of spot-beam coverage of the U.S. for two-way voice and data. The TerreStar satellite is suitable to eCall and commercial applications or for rural areas that lose terrestrial cellular networks during natural disasters. Sirius XM's satellite network has also been put to use for telematics applications including traffic and weather. Sirius XM also recently acquired the assets of Worldspace, meaning the European satellite radio provider could some day participate in telematics opportunities. Worldspace competitor Ondas has deals in place with several European OEMs, but no satellites. It’s been a long road, but the reality has finally caught up with the vision. The so-called S-band DVB-SH spectrum allocation for Europe was awarded to Eutelsat and a joint venture partner SES Astra. (Ico was one of the other bidders and is still mounting a legal challenge to the award.)   DVB-SH offers the ability for bi-directional communications for low-bandwidth ITS applications – available by the end of 2010 – along with some limited two-way communications to be launched in 2011. But DVB-SH expects to realize the prospect of entertainment content delivery for embedded, aftermarket and portable devices. This capability is important given that several SISTER participants expect that telematics services will have to be bundled with entertainment content to be attractive to consumers.   The recommendation of at least one presenter at the SISTER workshop was that all vehicles operated by public authorities should be connected via satellite, that all commercial fleet vehicles should be similarly connected and that, ultimately, all consumer vehicles should be linked via satellite. Some combination of public and private funding will surely be necessary, but the anticipated benefits to road safety and traffic management have already been proven by SISTER’s experiments.

A grand experiment is unfolding in the traffic reporting industry around the simultaneous confrontation between and combination of GPS probe and handset signaling data for traffic flow analysis. Both technologies offer the promise of transforming traffic data from an annoying and often disappointing proposition to a more precise and satisfactory experience. But push is about to come to shove in North America – with three pending OEM RFQs in play. The results of these OEM evaluations will likely have a global impact on the traffic data processing industry. To recap, current traffic data consists of: 1. GPS-based fleet data – derived mainly but not exclusively from commercial vehicles 2. Public data – loop sensors and other traffic tracking systems installed and managed mainly by public authorities 3. “Journalistic” data – incident inputs from emergency responders and private sources GPS probe and cellular hand-off data is, in essence, a fourth layer that is of increasing importance to traffic reporting and interpreting systems. The other key element, of course, is the secret sauce added by the aggregators and processors of this data. The aggregators and processors are of several types including those that aggregate a single type of data, such as AirSage or IntelliOne that process cellular handoff data, or that combine several different types of data, such as Inrix or ITIS Holdings, or that provide a system or a tool for processing or for publishing multiple data feeds, such as MILE (MobileInfo.Life Europe) Traffic and Travel, Gewi or PTV. Inrix is a fourth type of provider in offering a platform for both service and content aggregation – including traffic. Inrix has also been a pioneer, along with Navteq’s Traffic.com, in combining multiple real-time and historical traffic data into a predictive traffic model. This strategy has been adopted by others, most notably TomTom. MILE Traffic and Travel is unique for its model of licensing its data processing technology. TomTom is also best known for its pioneering work in integrating both cellular hand-off data (from Vodafone) and GPS probe data (from its Live Service subscribers). TomTom’s success in turning cellular hand-off data into a compelling solution in mobile devices has been an inspiration for both the emerging GPS probe market players (TCS, RIM, Google, Nokia Navteq, etc.) and the cellular hand-off companies. (ITIS claims to be the first to achieve this integration in a commercial solution.) The impending integration of both GPS probe data and cellular handoff data is a test for the industry to see if it can finally get the traffic data solution right. At stake are the hearts, minds and wallets of hundreds of millions of drivers using mobile devices and embedded navigation systems to seek out the most efficient means of getting from point A to point B. GPS probe data is renowned for its accuracy and increasing pervasiveness, as public authorities in multiple geographies have begun requiring GPS technology on handsets for emergency response purposes. The problem with GPS, though, is its impact of device power consumption. Because of this, many users choose to turn their GPS signals off when not in use. In contrast, cellular hand-off data is truly pervasive. While more difficult to interpret and notorious for the incidence of false positives, cellular hand-off data is unmatched for the sheer volume of data generated. For this reason, companies playing the cellular hand-off game, such as TomTom, MILE Traffic and Travel and AirSage, have an edge in the next wave of traffic data solutions. The only implemented solutions thus far have been TomTom’s industry-leading HD Traffic offering in Europe and Westwood One’s more limited use of AirSage data as an enhancement to its own traffic reporting products. AirSage is unique in its recent successful efforts to bring together data from multiple carriers. The company recently added Verizon to its existing Sprint relationship and is poised to deliver the first multi-carrier solution for North America. AirSage and other North American players have long been delayed in their efforts to deliver a cellular hand-off solution in North America due to the more heterogeneous carrier networks. The good news for these companies, though, is there is a significant business in logistics to be derived from the location data (for shipping, traffic management, store and cell tower locatin selection) and location-based advertising solutions are also beginning to emerge. The turning point for the industry likely lies in pending North American RFQs at BMW, Toyota and OnStar. From luxury vehicles to mass market movers, drivers have let car makers know that the current crop of traffic solutions are not cutting it. The information on the display does not correspond with the events unfolding in front of the windshield. The outcome of these OEM evaluations will likely determine the direction of traffic data processing for years to come. Additional Insights: http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel - Navigation and Location Opportunities http://bit.ly/aoQdpd - North America Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel – Wireless Media Strategies http://bit.ly/aHhWeV - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel - Wireless Media Strategies http://bit.ly/cc6O9K - PND Owners Unlikely to Discontinue Using Their Device - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c5f65I - Automotive and Portable Navigation Market Forecast 2008-2016 - Joanne Blight - Automotive Multimedia and Communications Systems http://bit.ly/b5W8ZS - Nokia and RIM Push Into Automotive as ‘Apps’ Competition Mounts - Joanne Blight - Automotive Multimedia and Communications Systems http://bit.ly/9NoM13 - From Probes to Crowd to Community to Ads – Traffic Data Evolving Rapidly - Roger Lanctot - blog - Global Automotive Practice

As Hyundai Motor America has surged to the top or near the top of ratings and sales rankings, the company has also been preparing a unique launch strategy for its Equus luxury sedan while simultaneously laying the groundwork for a January 2011 launch of a telematics system comparable to General Motor’s OnStar - a launch that is likely to take place in conjuction with the 2011 Consumer Electronics Show. Hyundai’s goal is nothing less than to become the most loved, most trusted and highest satisfaction mass market automotive brand. That is the word from U.S. president John Krafcik, whose background includes tenures with Ford Motor Company and Toyota Motor Sales. Krafcik says digilence, frugality and harmony are the internal principals that have guided Hyundai Motors to a remarkably competitive stance in the market. He proceeded to share the roster of recent company achievements this week at the monthly Washington Automotive Press Association luncheon: -> Projected 4.4% share of 2010 global unit vehicle sales -> 7^th largest brand in the U.S. – expects to surpass Dodge for 6^th place by the end of 2010 -> 4^th largest OEM globally 2010 -> 4th in J.D. Power’s IQS (Initial Quality Survey) in 2009 behind Lexus, Porsche and Cadillac -> 4^th in Consumer Reports reliability report card for 2010, up from #9 in 2009 -> Genesis: 2009 Car of the Year -> Automotive Lease Guide residual values: Sonata tops Honda Accord, Tucson tops Toyota Rav4, Veracruz tops Toyota Highlander, Genesis tops Lexus GS350 -> #1 in EPA’s average fuel economy rating: 30.9 – 2008, 30.1 – 2009 (projected), 31.9 – 2010 (forecast) -> Overall transaction prices up 11% relative to 2008 – now 97% of Toyota transaction prices -> Sonata most shopped on Edmunds.com for past straight eight weeks -> Hyundai included in the shopping lists of 28% of light vehicle purchase intenders – company survey -> Sales up 51% year-to-date vs. 2009 Key elements to Hyundai’s strategy include rapid deployment of marketing programs such as Cash for Clunkers (deployed July 2 – ahead of the July 24^th completion of the policy announcement) and the assurance program for customers that might lose their job after their vehicle purchase. Perhaps most important was the company’s 10-year/100,000 mile warranty, which internal surveys showed to be the primary reason customers chose Hyundai. Hyundai also implemented free roadside assistance for five years, which surveys showed was the third highest reason for brand selection. A strategic decision that reduced cost and weight on the company’s highest profile vehicle, the Sonata, helped the company achieve category leading fuel efficiency. Hyundai chose to offer the Sonata with only four cylinders, including direct injected and turbo versions. By offering only 4-cylinder engines on the Sonata, the company saved 50-100 lbs. in weight from not needing the hardware on board to support optional 6-cylinder engines. Hyundai was thereby able to achieve both category-leading 274 horsepower and 37 mpg fuel efficiency. The next step for Hyundai is the launch of the Equus. The company is limiting distribution to a select group of exclusive Hyundai dealers (ie. that sell only Hyundai-brand vehicles) capable of supporting a program characterized by test drive requests fulfilled at the customer’s home or office, pick-up of vehicles for service calls with the drop off of a loaner at their home or office and the inclusion of an Apple iPad pre-loaded with the vehicle’s owner’s manual and a service scheduling application. In fact, after a recent meeting with its dealer council, Krafcik says Hyundai is considering the possibility of offering Equus-like customer service across its fleet. He noted that the Equus is expected to arrive in September with extraordinary luxury appointments (ie. heated rear seats and refrigerator) yet priced between the mid-50’s and mid-60’s. Other calendar year 2011 introductions detailed by Krafcik include new versions of the Elantra, Accent and Santa Fe and a hybrid "sporty coupe" to compete with Honda's CRZ. Of course, the icing on the cake for Hyundai will be the launch of its telematics service in January of 2011. Krafcik offered no details except to suggest that the company will opt for an embedded solution a la OnStar. Hyundai is no-doubt envious of the kind of customer loyalty a well-executed telematics strategy can deliver. Hyundai clearly thinks telematics will only get them closer to fostering the love and trust they are seeking. The timing of the telematics launch suggests Hyundai will seek to make a Ford Sync/Microsoft-like splash at the Consumer Electronics Show in January. The 2011 CES is shaping up as a significant automotive technology launch pad as rumors of Apple- and Google-branded cars are swirling in the industry seven months in advance of the event. Additional Insight: http://tinyurl.com/249ajt7 - Tier 1 Vendor Regional Design Center Database – Kevin Mak – Automotive Electronics Service http://tinyurl.com/27jt7bt - EV/HEV Technologies Supply & Fitment Database - Kevin Mak – Automotive Electronics Service

Cypress Semiconductor’s announcement of the availability of automotive qualified TrueTouch capacitive touchscreens and LIN capable CapSense touch-sensing controllers promises a sea change in automotive console designs. While designers and engineers around the world continue to debate the relative merits of touch screens vs. voice, steering wheel and other interfaces, the advance of touch screen technology is rapidly settling the issue in favor of touch.Strategy Analytics analysis of the automotive and mobile device markets shows a steady shift in favor of touchscreens in multiple geographies. The reason for the movement is obvious given Strategy Analytics consumer research showing clear user acceptance and preference for touch screen technology. The industry is responding, however slowly. Another rationale for touch screen implementation is the greater flexibility for accessing applications and allowing a wider range of features and functions within those applications. The importance of the Cypress announcement needs to be considered in view of recent console designs and demonstrations as well as longer term industry trends. The BMW i-Drive, Audi MMI and other controller-type interfaces take advantage of the natural positioning of the right arm and hand on the center console. These configurations are designed to allow the primary LCD display be located as high in the dashboard as possible – far from the driver and NOT touch enabled. Of course, these interfaces allow for a broad simplification of the dashboard HMI configuration – with many fewer buttons and switches. The trouble is that controller-style interfaces still require too much checking of the screen to make selections or to move through multi-level menus. While the positioning of the screen is intended to reduce the change in focal length for the driver, it is not mitigating the inherent distraction. Tesla Motors, for one, is moving the touch screen closer to the driver and increasing its size to 14 inches and using a portrait configuration. Johnson Controls and Delphi have taken similar approaches in demonstration systems. But Delphi went one step further at the recent SAE event by positioning the display more or less in the console beneath where the driver’s arm will rest. By positioning a touch screen display in the console, the system removes the need for the controller interface completely. Some car makers are even combining a touchpad device – as in the case of Audi’s recent introduction able to recognize drawn characters – with a second display in the dash thereby providing some redundancy and/or a means of previewing inputs before they are selected. Delphi takes the concept a step further still by having a completely different HMI for when the vehicle is at rest vs. when it is in motion. In other words, different functions are available in the two different modes. (Smartphone applications, for example, are accessible when the vehicle is at rest.) As more consumers become increasingly familiar and comfortable with touch screens – rapidly proliferating in the mobile device segment thanks to the iPhone and Android-based devices – auto makers are finding greater acceptance for these interfaces in cars. Console-mounted touch screens will also enable easier access to a wider range of vehicle functions as well as location aware applications. With a touch-enabled display in the console, the driver will no longer have to reach out for the center stack. All applications and content will be right at the finger tips – again, with a second display mounted in the dash as a reference prior to making selections. Cypress may be the first, but will not likely be the last to bring capacitive touch technology to the automotive market. The advantages of wider design options, reduced distraction, enhanced functionality and potential cost savings mean that – well, resistance is futile. Cypress says the TrueTouch controllers are the industry’s first automotive-qualified capacitive touchscreen solution. The CY8C2x345 CapSense controllers pair analog resources with automotive industry standard LIN communication support, making the devices the ideal system controllers to interface with analog and capacitive touch-sensor inputs, and to control backlight LEDs and haptic actuators while communicating over the LIN bus. Cypress also announced that Grace Semiconductor in Shanghai, China has been qualified to fabricate automotive-grade CY8C2x345 CapSense controllers that adhere to the AEC-Q100 standard, ISO/TS 16949 quality management standard and Cypress’s Zero Defect manufacturing system. Cypress says its solutions are available in single-touch, multi-touch gesture and multi-touch all-point offerings and provide the ability to track multiple fingers simultaneously. The TrueTouch solutions are able to control screen sizes up to nine inches. They are designed for use in control panels, GPS and infotainment displays. Cypress says CapSense proximity sensing offers a detection range up to 25 cm, saving power by activating an interface only when needed. The devices are ideal for interior automotive applications such as audio, navigation, AC control and lighting control, as well as exterior applications such as trunk release and passive keyless-entry buttons, according to the company. The newly qualified CY8CTMG120 multi-touch gesture and CY8CTMA120 multi-touch all-point controllers are available for sampling in 56-pin QFN packages. The newly qualified CapSense products include the LIN-capable CY8C2x345 devices, available for sampling in A grade (-40C to 85C) in 28-pin SSOP packages with the 48-pin SSOP packages planned in Q3 2010. All products are expected to be in full production in Q3 2010. http://bit.ly/c1Qhxz - Benchmarking the Premium In-Vehicle Experience - Chris Schreiner – Automotive Consumer Insights http://bit.ly/cRLVkz - Automotive HMI: Voice Technology and Touch Screens Have Significant Lead - John Canali – Automotive Multimedia and Communications Service http://bit.ly/a9aEgu - Chinese OEMs: Rapid Advance In Quality Bodes Well For Automotive Electronics - Kevin Mak - Automotive Electronics Service http://bit.ly/ceBUCY - Vehicle Entertainment and Navigation User Evaluation: 2010 Lexus LS460 - Chris Schreiner - Automotive Consumer Insights

The business of capturing and reporting real-time traffic data is on the verge of a deluge of data from millions of GPS probes. From Google to RIM to TCS, TeleNav, Nokia/Navteq and others, the integration of handset GPS data feeds will transform the industry and alter consumer acceptance of traffic data. The importance of this development is the fact that consumers surveyed by Strategy Analytics, time and again, indicate that traffic data is the single most important application on their portable device followed closely by navigation. This is no surprise to marketers who are keen to target customers potentially on the move from one place of business to another and seeking to get there in the most efficient manner possible - which is to say, the supplier that delivers the highest quality real-time traffic data will have a privileged marketing platform for delivering advertising messages. But the onset of traffic data enhancements, though happening swiftly, will unfold as part of an evolution of traffic data that will progress from the combination of public and fleet data of today, to the aggregation of GPS data and crowd-sourced inputs, to the traffic “communities” of the near future. This transition will test the current market leaders and could shuffle the leadership ranks, but it will also reveal new opportunities for information and content sharing. Among the industry leaders watched most closely is Nokia Navteq. With the largest number of mobile devices deployed, Nokia is in the most powerful position to leverage GPS probe data. (Editor's note: updated info from Nokia Navteq follows) Navteq is using GPS probe data to enable accelerated expansion of its Navteq Traffic coverage including primary and secondary roads. The company says probe data is an integral part of its global probe data strategy. Navteq is currently collecting and integrating Nokia probe data records for Navteq Traffic in Belgium, Brazil, France, Finland, Germany, Sweden, the United Kingdom, the United States and Canada with plans to expand. The company expects to benefit from the growing variety of connected devices also using Navteq data and services. Navteq says that nearly 23M processed probe records are integrated into Navteq Traffic monthly in the U.S. in major metropolitan areas including Atlanta, Boston, Chicago, Houston, Los Angeles, New York, Orlando, San Francisco and Seattle. Worldwide, Navteq is collecting 3B probe records including Nokia data and anticipate a doubling of that figure by the end of 2010. Most executives in the industry now agree that TomTom’s HD Traffic solution, built around cellular signaling data and TomTom’s Live Service subscriber probe data, is the state of the art for real-time traffic data. The service is available in six European countries including Germany, where this analyst has used it side-by-side with RDS-TMC data. Nothing this analyst has seen has come close to the apparent completeness and accuracy of the real-time traffic data reporting on a connected TomTom. Long accustomed to incorrect traffic information delivered on a variety of embedded and mobile devices, I found the HD Traffic solution to be a revelation. In several days of driving on autobahns throughout Northern Germany it never once told me I was in a “stau” when I wasn’t or vice versa. Traffic information that contradicts reality continues to be the industry bugaboo. Just as important, the TomTom solution doesn’t rely solely on color-coded roads. The key interface is the barometer on the right hand side of the screen which shows the distance to the next point of traffic congestion and the anticipated delay. At this point in the evolution of traffic information delivery, color codes don’t cut it. They are nothing more than a distraction. With the arrival of mobile phone navigation applications the industry is poised to take a leap forward and sideways at the same time. The leap forward is the potential to replicate the HD Traffic experience on more navigation platforms. The sideways move is that this leap is taking place in connection with a device offering a much smaller screen for delivering up-to-date traffic information to drivers. In addition, with so many new players integrating new data sets for the first time there is bound to be confusion and user interface missteps. After all, if it were easy to convert mobile phone data into real-time traffic feeds this problem would have been solved a long time ago. To remove any doubts about the rising influence of mobile phone navigation, one need look no further than the recent financial reports of TeleCommunications Systems (TCS) – which acquired Networks in Motion – and TeleNav – which completed its initial public offering last week. In its earnings call, TCS said it expects $55-$65 million in mobile phone navigation subscription/sales revenue in 2010 and ongoing revenue growth of 30 percent/year going forward. TeleNav reported that it had 14.5M navigation subscribers/customers (up from 11M at the end of September 2009) and revenue of $122M for the nine month period ended March 30^th, a growth rate of 59 percent. While TCS says it has 5-6 percent penetration of its addressable carrier customer base and anticipates increasing that to 30-50 percent, TeleNav claims a 20-25 percent rate of penetration. TeleNav, TCS and TomTom are all seeking to build their subscription bases as swiftly as they can which has led to discounting and bundling, thereby impacting average revenue per user (ARPU). All three companies have indicated a disinclination to share their ARPU figures. TCS has been coy about disclosing the size of its subscriber base. It remains to be seen if TeleNav and TomTom will continue to be forthcoming about their subscriber numbers. All of these numbers are vital to discerning consumer preferences for different business models and could serve as a competitive advantage for these early movers. The integration of anonymous handset signaling data currently used by TomTom, is likely to be supplanted by handset GPS data feeds. And the availability of GPS data feeds has greatly lowered the barriers to entry to the traffic business. Any company from industry titans such as Inrix and rising heavyweight Google to scrappy start-ups like Skobbler (which recently became the first navigation supplier to use OpenStreetMaps) can introduce a mobile phone application that will immediately start reporting GPS data for integration in a real-time traffic platform. Industry executives agree that the GPS data is more accurate an easier to process than hand-off data. That does not mean that signaling data will go away, especially since TomTom continues to use it, but it does represent a change that could ultimately manifest in changing user preferences if the “quality” or accuracy of one type of data is found to be or perceived to be superior to the other. Miles Traffic and Travel – a consortium of ITIS Holdings (U.K.), Infoblu (Italy) and MediaMobil (France) – is also making use of cellular hand-off data and has been chosen by BMW as its traffic data provider for Europe. MT&T is positioning itself as the first challenger to TomTom’s HD Traffic solution. All industry participants agree that the aggregation and integration of hand-off data is a non-trivial exercise. Case in point, AirSage and IntelliOne have been trying to deliver anonymous hand-off data in a commercial solution for years with no success to date. But even the arrival of handset data will not represent the “end of the road” in the evolution of real-time traffic data. The next step is already apparent in the quiet emergence of aha mobile, Telmap, Waze, TrafficTalk and other potential players seeking to build communities around the delivery of traffic and routing information. Aha mobile’s content and services aggregation platform serves as a front end for the full range of Internet-accessible content, including traffic and navigation information. Aha mobile’s traffic solution, though, allows drivers to share geo-coded traffic observation inputs with one another – in other words, an aha mobile user could literally share with fellow travelers what he or she is seeing out the car window. The aha mobile solution represents the same kind of ultra-local location data that Telmap is  trying to provide with the location aware services that are part of its navigation application. Waze also creates a community around traffic, navigation and the creation of the navigation map. For its part, TrafficTalk is seeking to build user communities around specific commuting corridors where drivers can share voice inputs regarding traffic conditions in their immediate vicinity. Today, the industry is poised for the next round of the shoot out at the OK Traffic Corral. All the major players have new ammunition in the form of handset GPS data and the emergence of this new source of data is creating new competitors and new opportunities. But this enhancement to traffic information is just another bend in the road which will lead to traffic information communities sharing on-the-ground information which will transform the industry yet again and set the stage for the next advance. Additional Insights: http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel - Navigation and Location Opportunities http://bit.ly/aoQdpd - North America Mobile Handset Navigation Forecast 2004-2014 – Nitesh Patel – Wireless Media Strategies http://bit.ly/aHhWeV - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel - Wireless Media Strategies http://bit.ly/cc6O9K - PND Owners Unlikely to Discontinue Using Their Device - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c5f65I - Automotive and Portable Navigation Market Forecast 2008-2016 - Joanne Blight - Automotive Multimedia and Communications Systems http://bit.ly/b5W8ZS - Nokia and RIM Push Into Automotive as 'Apps' Competition Mounts - Joanne Blight - Automotive Multimedia and Communications Systems

Audiovox Corporation reported a profitable fourth quarter and fiscal year today suggesting a significant turnaround fueled by the resurgent automotive industry generally and recovering satellite radio and rearseat entertainment categories specifically. The report was terrific news for Audiovox, which held its earnings call this morning, but the good news seemed somewhat empty in view of a lack of innovative new solutions or even a stated vision of vehicle connectivity from the normally creative electronics supplier.The company built upon the good earnings news by announcing that it foresees developing a $100M OE portfolio for fiscal 2011 thanks to the addition of Qualcomm’s in-vehicle Flo-TV business and the acquisition of RSE supplier Invision and remote start/vehicle security player Omega. Invision’s existing RSE deals with GM and Toyota represented a solid shot in the arm to Audiovox’s own aftermarket business. The electronics segment of Audiovox’s business saw a revenue decline in fiscal 2010 due to reductions in inventory and the exit from several product lines including flat panel televisions and portable navigation devices. Combining the Invision RSE line with its own aftermarket RSE business, Audiovox now boasts relationships with GM, Ford, Chrysler, Nissan, Hyundai, Porsche, Kia, BMW, Toyota, Subaru and Mazda. With expectations of 11M cars being sold in calendar 2010 in the U.S., Audiovox expects the current boost in its fortunes to continue. The electronics segment’s sales were $375M for fiscal 2010, down 16.6% vs. the year-ago period due mainly to the decline in automobile sales and the recessionary economic environment. The company pointed to the positive impact from new programs with Sirius XM, Sony (PS3 integration with RSE system) and Flo-TV and noted that the acquisition of Invision has been instrumental in positioning the company to build on its existing OE relationships. Many of Audiovox’s existing relationships derive from the support of its own expeditor network, one of the largest and most effective installer networks in the industry. In its earnings call, Audiovox said mobile sales were up over the fiscal 2009 fourth quarter due primarily to increases in satellite radio, security and multi-media products, and the addition of new sales from Invision, Omega and Flo-TV. As a percentage of net sales, Electronics represented 71.4 percent of sales for the fiscal 2010 fourth quarter as compared to 62.3 percent for the comparable period in fiscal 2009 - demonstrating the increased importance of mobile electronics sales.

Audiovox is uniquely positioned for a range of significant automotive business opportunities including remote vehicle connectivity and security and video distribution within the car. The company does offer a range of head unit products that provide for multiple connectivity options and continues to offer non-desktop computing platforms suitable to automotive applications. The onset of connectivity and social networking present a range of potentially profitable opportunities awaiting a solution from Audiovox..

 

If there was anything missing from the earnings call it was a statement of strategy vis a vis social networking applications and Audiovox’s plans to capitalize on the trend. The partnership with Qualcomm for Flo-TV represents one avenue for Audiovox to connect with the rapidly growing smartphone market. The company introduced the Jensen Anyware Ultra-Mobile PC last fall, but there was no mention of the product on today’s earnings call, nor was their mention of Audiovox’s range of head unit offerings under multiple brands. Perhaps the next earnings call will bring news of more creative mobile initiatives and a vision of future vehicle connectivity.

Change is coming to the automotive industry via U.S. government entities that suddenly have the cash, the power and the public mandate to significantly influence the direction of vehicle design and surface transportation. With multi-billion dollar investments in two of the one-time Big Three automakers, the Federal government suddenly has unprecedented leverage over the industry along with a clearly defined agenda for enhancing safety and reducing vehicle emissions. Just a few years ago industry participants were inclined to eye roll and shake their heads at the plans of connected vehicle (VII, V2X) and HEV/EV advocates, preferring to stick with the prevailing traditional disconnected ICE (internal combustion engine) vehicle mentality. In the words of an old American advertising slogan: When something works you stick with it. What a difference a few years, an economic downturn and a massive embarrassing recall can make! Consumers are shifting to 4- and 6- cylinder vehicles. And even without incentives, consumers are turning to HEVs most notably Toyota’s Prius. What were once seen as pie in the sky visions of connected electric vehicles have rapidly become remarkably realistic opportunities – even if substantial EV sales volumes are still somewhat out on the horizon (SA EV/HEV forecast - http://bit.ly/9s3lid). Hundreds of billions of dollars have been invested by federal and local governments – as well as overseas governments – to incent EV development and sales. (Strategy Analytics has a spreadsheet of more than 300 EV/HEV legislative initiatives worldwide -  http://bit.ly/aRdhK8.) At the same time, the National Highway Traffic Safety Administration (NHTSA) has stirred to life stimulated by both a distracted driving crisis (from growing fatalities due to talking and texting drivers) and the Toyota unintended acceleration debacle. NHTSA, which was quite recently focused on fusion safety system technology in cars – making use of multiple sensor inputs to assist drivers in maintaining lanes, monitoring blind spots and avoiding crashes – has firmly shifted to an emphasis primarily on avoiding and surviving crashes. The agency is also seeking data recorder mandates among other initiatives. The crash avoidance portion of NHTSA’s campaign has V2X written all over it. While monitoring blind spots and maintaining a lane are important vehicle applications, true crash avoidance technology can only be achieved with vehicle connectivity to other vehicles nearby and not so nearby as well as to infrastructure using DSRC technology. In fact, at the latest ITS meeting the organization made clear that it is compiling a database of 5.9MHz DSRC providers who will be able to meet the antipated demand for line fit and aftermarket modules. DSRC was heavily touted and endorsed at the latest ITS meeting in Houston. The ITS is on the verge of releasing its roadmaps for V2X implementation. It is worth noting that the organization is expending significant energy on providing for the use of mobile devices and aftermarket boxes to enable connectivity. (Coincidentally, the European Union has announced its endorsement of similar connected vehicle objectives and implementation plans – http://bit.ly/bFaIUm.) The time lines may still be conservative and technical issues remain (see ITS conference concluding presentation http://bit.ly/bYio4k), but the mandate and the mission is increasingly clear on both the emissions reduction and the safety fronts: In the future, connectivity will be king. Still, despite the increased interest in safety among legislators, consumers and the Federal government, safety remains a tough sell with consumers. (SA – Consumers Interested in Safety, but not at Current Prices - http://bit.ly/a56WTM) This is why the increased influence of the government is so important. It will require government mandates to change vehicle designs and force consumer acceptance. Now, more than ever, the Feds have the influence and industry participation they require to bring significant change to pass. This type of mandate applies to EVs as well. The U.S. is unique in the world in its governmental inability to force through the kind of fuel taxes that could change behavior. Lacking this lever, Federal and local governments have turned to incentives to encourage consumers – and car makers – to bring electric vehicles to market. (This and the CAFÉ standards regime - http://bit.ly/cBwp2r - U.S. #CAFE Standards Give Impetus to Wide Range of #Green Technologies.) Here, again, the influence of the government along with growing consumer interest in both HEVs and EVs are approaching a transformative critical mass. Industry observers have questioned the wisdom of fostering EV technology when the current state of technology is as limited as it is. But it is only with this kind of government support that the obstacles of charging infrastructure, battery capacity and price can be overcome. Ray Lood, the director of NHTSA, removed any doubt about the government’s passion for change in the automotive industry when he described his own anti-distracted driving efforts at the recent ITS event in Houston as “a rampage” (http://tinyurl.com/24vzrka). A rampage indeed! Change is coming, probably faster than previously conceived possible. It is coming with government impetus and supervision and it is coming whether the industry likes it or not. Additional Insight: http://bit.ly/bbhqGj - Voice HMI: Connected Car Opportunities and UX Best Practices - Chris Schreiner http://bit.ly/ajzQay - Future Promise of V2X Wireless Comms – Chris Webber http://bit.ly/9qf1Mh - EV/HEV Technologies Supply and Fitment Database – Kevin Mak http://bit.ly/9esI9W - Advanced Driver Assistance Systems: Supply and Fitment Database – Kevin Mak

A heated debate over driver distraction animated an otherwise placid confab of the Networked Vehicle Association (NVA) in Palo Alto recently. The distracted driving discussion was led by an attorney and a representative of the National Safety Council (NSC). The significance of the exchange was rooted in the debate over safe use of mobile phones in a moving vehicle. But, of course, with the participation of the NSC the very issue of using any mobile device in a moving vehicle was called into question. The NSC is in favor of an outright ban on all mobile phone use in automobiles. On the legal front, a representative of the Gowlings law firm described how laws were introduced to prohibit radios in cars when car radios were first introduced in the 1920’s. These proposals were defeated, but they laid the groundwork for the current debate. Interestingly, the argument that won the day for preserving the right of the radio to be built into the car was safety. Radios were perceived as preventing accidents by keeping drivers awake. Vehicle and entertainment technologies have changed but the grounds for allowing mobile phone use in the car remain the same – safety. Mobile phones used by motorists are responsible for many more emergency calls than embedded telematics systems. For this reason alone, it makes sense for legislators and the industry to find ways to preserve the right of a driver to use a mobile phone. But the debate over using devices in a moving vehicle has changed with the passing of 80 years since the introduction of car radios. Thanks to 30 academic studies of driver distraction and mobile phone use, a variety of organizations, including the NSC, the National Highway Traffic Safety Administration, and the National Research Council, have all concluded that talking on a phone held to the ear is cognitively equivalent to using a hands-free device. The NSC executive at the NVA event further described the types of studies – including brain scans etc. – and the outcomes – including the concept of tunnel vision experienced by distracted drivers. The significance of the findings of these studies, according to the attorney, is that they serve as the precursor to legal action which is the first step on the path to legislation. The findings of the various studies, as detailed by the attorney, included: NHTSA: Lower number of fatalities in states with primary legislation banning cellphone usage while driving; AAA: Degree of driver distraction no greater than tuning a car radio; Carnegie Mellon: MRI scans and simulation demonstrate impaired sensory and motor function equivalent to DWI; Highway Loss Data Institute: No change in loss data due to legislation vs. states without cellphone bans, but study concedes loss data may be inaccurate due to corresponding unmeasured rise in hands-free usage. The findings that have been used to oppose any mobile phone use in a moving vehicle, in turn, are countered by at least three industry studies that conclude that hands-free use of mobile phones is a safe and effective measure to counter distraction. But even the Insurance Institute for Highway Safety found no reduction in distraction-related accidents from mobile phone bans. (The standard response from the anti-mobile phone community is that no states in the U.S. have introduced a complete ban on mobile phones that includes a ban on hands-free operation. Hence, existing laws banning phone use but allowing hands-free operation are not true bans and therefore the data cannot be used as an argument against bans.) The NSC representative at the NVA event remained adamant throughout that any and all mobile phone use in the car ought to be forbidden. The attorney concluded that the status of case law was fairly fluid and was influenced not only by the emotional element of fatalities resulting from distracted driving incidents, but also by research. The likelihood of an outright phone ban, though slim, cannot be completely ruled out. But a ban is likely to be unworkable and a step in the wrong direction, especially when considering that existing embedded telematics systems with their on-board phones would be rendered illegal. In an ideal world, the technology problem of managing mobile phone use in a car ought to be resolved with a technological solution, particularly considering that if a mobile phone ban were instituted drivers would find workarounds. The good news is that smartphone applications - such as Zoomsafer and tXtblocker - have been introduced to mitigate distractions from mobile phone use in cars (see Additional Insight below) and auto makers and suppliers - such as Mercedes Benz, Denso and Volvo - have introduced applications that monitor driver behavior to identify and counter driver distraction and drowsiness. In fact, one solution that is available, though not yet built into any systems that have reached the market, combines driver monitoring with a conversational avatar. The concept takes the Mercedes Benz driver drowsiness alert feature to another level by integrating and alerting the call center when a drowsy driver is detected such that, following escalating warnings, the call center can contact the driver to prevent an accident. Alternatively, the system, created by Great Changes – which owns the transportation license for Cognitive Code’s Silvia avatar, can engage the driver in an artificial intelligence-assisted conversation. The irony is that the NSC executive pointed out in his presentation that multiple studies show that it is safer to drive with a passenger. Interaction with a passenger helps keep the driver focused and alert. The Great Changes solution fulfills that requirement and the proactive call center alert aspect is a unique realization of the kind of safety enhancements promised by telematics technology. In conclusion, the attorney at the NVA event suggested that all industry participants monitor distracted driving developments closely, take into account human ingenuity and resolve in creating workarounds for technological safeguards, standardize and continuously evolve standards for telematics, and develop new “low driver impact” user-machine interfaces. Indeed, telematics should be seen as a potential remedy for driver distraction issues and as a safety enhancement to vehicle design. Under the NSC regime even embedded phones – as in OnStar, mBrace or BMW Assist – will be banned. Additional Insight: http://bit.ly/d3FQbQ - CTIA 2010: Distraction Mitigating Apps on Display – Chris Schreiner http://bit.ly/bbhqGj - Voice HMI: Connected Car Opportunities and UX Best Practices - Chris Schreiner