Mercedes-Benz recently launched its annual Winter Event, shortly after concluding its multiple-year legal confrontation with ATX, according to industry sources. The Winter Event includes an offer of 36 months of free mbrace telematics service for buyers of Mercedes-Benz vehicles who use Mercedes Benz Financial services and runs through January 4, 2011. Neither Mercedes nor ATX chose to comment on the report. The official statement: "ATX and Mercedes Benz jointly filed a statement (on Oct. 27) with the court that the lawsuit has been resolved. The companies have put together a process to allow for continued service to those Mercedes-Benz owners who wish to continue to receive services through their Tele Aid devices (at the consumer's discretion). We consider it a privilege to provide connected vehicle services to over 200,000 consumers with Tele Aid devices." ATX is the existing service provider for the Tele-Aid telematics service. Hughes Telematics is the new telematics service provider for the (renamed) mbrace service which includes a smartphone app platform. Both ATX and Hughes have been competing for new and existing telematics customers and will continue to do so. Details of the current situation were previously reported here: http://bit.ly/aCiL6T.  It is likely that ATX, currently in the process of adding new OEM accounts such as Toyota, is seeking to project a more non-confrontational image in the industry. The resolution frees up Mercedes to project a more consistent marketing message including, at some point in the near future, advertising that will incorporate mbrace. To date, OnStar has been the only auto maker describing telematics services in mass media messages. Interest and demand can be expected to grow in North America as more car makers launch embedded and smartphone-based telematics systems. Europe is also seeing the first stirrings of eCall compliant deployments. Additional Insights: http://bit.ly/aWhNuC - Automotive Sensor Demand Forecast 2008 to 2017: Global Economic Rebound Sparks Growth - Mark Fitzgerald - Automotive Electronics Service http://bit.ly/9QCIVw - Automotive Sensor Demand Forecast 2008 to 2017: Global Economic Rebound Sparks Growth - Datatables - Mark Fitzgerald - Automotive Electronics Service http://bit.ly/c0OLhT - Consumer Implications for Smartphone-Vehicle Connectivity  - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c1nvTq - Consumer Interest High for Connected Safety and Security Services - Chris Schreiner - Automotive Consumer Insights

TomTom’s marketing machine was in overdrive last week with announcements of a new OEM relationship (Mazda) and advances with existing partners (Toyota, Renault), enhancements to its (European) market-leading traffic solution (HD Traffic) and a traffic manifesto. But undoing all that positive spin was the note that the company still wants to charge about $50/year for its Live Services. It looks like TomTom didn’t get the latest email about automotive value propositions. As connectivity comes to more vehicles, drivers (and passengers) will get more of their content and services from the “cloud.” What this means is that car makers will increasingly have in place systems for sending, receiving, processing and managing all types of vehicle data – the “back end.” (This is not unlike what is happening at your average NASCAR or Formula One event every weekend – without the parking space availability and Internet radio.) The value of this data is manifest to the car makers for better understanding the performance of their vehicles on the road as well as better understanding how consumers use and abuse their cars. The implications for cost avoidance, warranty and recall management are in the millions of dollars of savings. There is no immediate or obvious benefit to the driver. For this reason, this kind of vehicle connectivity ought to be free. (On the other hand, OnStar and others have demonstrated that people will pay for safety and security.) As more drivers shift to smartphones (with mandatory data plans) with access to a wide range of content and services, they will be less likely to pay for any service from the car (or PND) maker that is available for free (or for which they are already paying) via their mobile phone. So how is the industry (and TomTom) going to monetize all this connectivity? Enter the back end value proposition. Auto makers and Tier Ones have gotten the message and recognize that driver and passenger eyeballs and “click-throughs” have value. A driver asking for directions to a restaurant or movie has economic value. A system that knows the location of the driver has value. Beyond this, a system that is able to provide a broader “cloud” perspective of all location-related activity – including everything from prosaic traffic information to “heat” maps of gatherings of people, weather, etc. – has other value-add implications for drivers, passengers and roadway systems and public transportation overall. But in the short-term, vehicle related information for diagnostics, safety and entertainment take priority. Continental, Harman, Visteon, Delphi and Pioneer clearly understand this. All of these companies have introduced systems or platforms that seek to leverage vehicle location information for commercial opportunities. Even Best Buy’s connected PND delivered sponsored links in its Google Search. Unfortunately, Tier Ones face an uphill struggle in trying to get a piece of this action. The telematics eco-system consists mainly of a telematics service provider (ie. ATX), a carrier (ie. Sprint or Verizon) and a system integrator (ie. TCS). Each of these operators is interested in the other’s business – with the possible exception of the call center. (No one wants the call center hot potato – too much cost.) While the call center tends to be shunned, the data back end tends to be either misunderstood or underestimated. But the back end system is rapidly becoming the backbone of the system altering the competitive landscape. The power and influence of back end systems is visible to the consumer in the growing variety of free content and services via smartphones. Google probably has the largest back end system currently influencing developments in the automotive market. With its free navigation, traffic and search and an open source operating system, Google has rattled the industry mightily over the past two years. Carriers, meanwhile, are trying to fight there way in – not content to be simply white label suppliers of bandwidth. Among the carriers sniffing around the telematics back end opportunity are Verizon, Sprint, T-Mobile, Telenor, Orange, AT&T Mobility, Vodafone and Ericsson. All of these companies recognize that their servers are as valuable as their networks. Some of these companies fancy themselves Tier One players. At least three handset makers have the potential to rise to the Google challenge: Nokia, Apple and RIM. Like Google, Nokia is offering free navigation while also seeding the market with open source development tools (Qt), operating system softare (MeeGo) and smartphone connectivity technology (Terminal Mode). But Nokia remains ambivalent about the automotive opportunity. MeeGo is not ready for market and Ovi has not been designed for automotive opportunities. RIM brings a unique value proposition combining its smartphone system experience with its newly acquired QNX automotive expertise. RIM represents the most immediate threat to Google’s potential dominance in the automotive market because of its potential to deploy navigation and traffic applications (based on handset probe data) and its ability to monitor, manage and mine its network data traffic. Apple’s strength lies in its secure systems for managing commerce for downloading applications and enabling the purchase of content. For these reasons, Apple and RIM both have the scope and scale to add value to automotive opportunities. The massive giveaway of content and services by both Google and Nokia is a setup for capturing click-through traffic and back end processing opportunities for creating metrics and analytic output. Google already has the analytic tools in place, unlike Nokia. The current landscape for back end services is highly fragmented and includes companies such as TeleNav, Airbiquity, Hitachi, TeleCommunications Systems, Hughes Telematics, WirelessCar, Oracle and IBM, along with the previously mentioned wireless carriers, RIM and Apple. (Strangely, Microsoft seems to have disqualified itself – having disbanded its automotive business unit. The original vision defined by Microsoft at multiple industry events included integrating more and more Microsoft solutions such as Bing, Tellme, and Silverlight into automotive platforms, but the complete vision – including back end services – never materialized. The one exception to this no-show for Microsoft are the company's ongoing efforts to capitalize on the Bing search engine.) The value proposition of back end service providers revolves around secure management and processing of vehicle and driver data for applications ranging from vehicle performance and safety to content and infotainment and, ultimately, commerce opportunities. Neither OEMs nor Tier Ones are equipped to manage this opportunity and traditional telematics providers lack the scale. The lack of scale is one reason Airbiquity has partnered with Hitachi to service Nissan’s connectivity needs around the world. It is likely that companies such as Hughes and TeleNav will seek partnerships with larger integrators such as IBM or Oracle for the same reason. Nokia, like RIM, already has the scope and scale and like Apple already has the commerce platform (Ovi) but, unlike Apple, has done little beyond the introduction of terminal mode to optimize its offerings for automotive. TomTom is another player in need of a partner to provide the scope and scale necessary to compete in the connected space. The larger organizations that are able to monetize the connectivity proposition will force out smaller players dependent on subscription revenue. If TomTom can enhance its navigation and infotainment platform to include safety and security telematics, it will greatly improve its value proposition and the likelihood of building a devoted subscriber base. Conclusion Google and RIM are best positioned to leverage the back end data processing opportunity presented by the automotive industry. Google faces trepidation among potential OEM customers who are suspicious of the company’s motives and objectives. Google’s failure to validate its Android OS for automotive applications is another stumbling block. Nokia has discrete elements of a solution in place but so far lacks the commitment and execution to challenge either Google or RIM. Apple is a wild card player in a market that remains fragmented with the door open to new entrants. Microsoft's Bing search engine is another contender gaining traction, but, in the end, Microsoft is more of an arms supplier to the contesting parties. Winners in the battle for the back end will be those companies able to bring security and state-of-the-art analytics and commerce management to the automotive industry. Google knows analytics. RIM knows security and network management. It remains to be seen whether Nokia or some dark horse will step forward to challenge these two dominant players, but the race is on. Additional Insight: http://bit.ly/c0OLhT - Consumer Implications for Smartphone-Vehicle Connectivity  - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c1nvTq - Consumer Interest High for Connected Safety and Security Services - Chris Schreiner - Automotive Consumer Insights http://bit.ly/aGJHDj - Smartphone Market Evolution and the Automotive Opportunity Implications -Fitzgerald - Automotive Multimedia & Communications

Attendees at Ford’s recent launch of the 2011 Explorer at the Newseum in Washington, DC asked company executives if they were worried about the potentially distracting aspects of the MyFord Touch voice-based interface available on the new SUV. The answer from Ford was that MyFord Touch specifically enables hands-free use of vehicle systems allowing the driver to keep hands on the wheel and eyes on the road. This is the message that not all industry participants are grasping. The smartphone is rapidly becoming a platform for delivering safety systems into vehicles and yet leading governmental and non-governmental bodies continue to declare their opposition to the use of mobile devices in cars. The National Safety Council, the U.S. Secretary of Transportation (Ray LaHood) and the American Automobile Association have all declared their opposition to mobile phone use in cars. Public authorities should speed, not impede, the path of technological progress. If smartphones can deliver safety to drivers faster than embedded systems or DSRC-based systems requiring billions of dollars in infrastructure investment, so be it. And new applications from companies such as ImaginYze and Global Mobile Alert, among many others, are making advanced safety technology available via smartphone apps. Fortunately, none of this opposition to mobile phone use in cars has produced national or even local legislation banning mobile phone use altogether. Most laws only go so far as to either ban texting and driving or to require hands-free devices. In some states, teen drivers are forbidden to use mobile phones while driving. Nevertheless, the campaigns continue, including Oprah Winfrey’s NoPhoneZone. Germany probably has the best solution in allowing mobile phone use in a car but forbidding the touching of the phone while driving. This seems like an effective and appropriate solution especially since it allows the driver to continue to benefit from the growing range of applications that provide for enhanced safety. Throughout the world the race is on to bring advanced safety systems to cars. The European Union most recently detailed their plans to mandate safety technologies. One can only hope the EU will not proceed to define which technology is used, as in the case of eCall. If there is anything that has slowed down the advance of connected safety systems in European cars it has been the pursuit of a mandated technology on top of the application mandate. Meddling governments – operating with the best of intentions – have repeatedly intruded on new technology development and instead of stimulating innovation and competition have quashed both. In the case of eCall, the in-band modem technology selected by the EU arrives as an already outdated solution that continues to be resisted at the Federal, OEM and public service access point levels. (In contrast, the U.S. is already well on the way to defining and deploying far more flexible digital solutions as part of its Next Generation 911 initiative - http://bit.ly/9jg576.) European research initiatives ranging from SISTER (http://bit.ly/cTiRxx) – which looks at satellite-based safety solutions – to AKTIV (http://bit.ly/b4og1K) – which looks at the efficacy of embedded cellular technology for safety apps – to TeleFOT (http://bit.ly/c9AeT8) – which is assessing nomadic device-based safety systems all reveal the range of available solutions capable of fulfilling the newly-minted EU program of safety system mandates (http://bit.ly/aNDSh1).  Even Ertico’s ADASIS, the Advanced Driver Assist Systems Interface Specification Forum (http://bit.ly/9Lkngj) has been considering smartphone-based solutions. At the most recent ADASIS meeting a solution was presented as part of a separate presentation showing a solution from ImaginYze (http://bit.ly/cUGFpM) offering an augmented reality lane departure warning solution based on a forward facing smartphone camera – a solution long in development - for portable navigation devices - from companies such as Navigon and Elektrobit. (Since its most recent meeting - July 5th - ADASIS has released a specification for map-based ADAS applications - http://bit.ly/axuJrc.) But it doesn’t stop there. About a dozen applications (http://bit.ly/d3FQbQ) have been launched around the concept of limiting mobile phone use in a moving vehicle, most notably Zoomsafer. Interestingly and maybe not surprisingly some of these companies have turned to commercial opportunities to enable safe use of mobile phones for fleet drivers.  Global Mobile Alert offers yet another application suited to both passenger vehicles and commercial applications. A $24.99 (per year) download for Android phones, which just launched two weeks ago, Global Mobile Alert is an application that uses a digital map as a sensor to warn drivers of approaching traffic lights, and school zones or railroad crossings, among other hazardous conditions (http://bit.ly/dhzigZ).  The Global Mobile Alert (GMA) crash avoidance application is the first of its kind and can be deployed in a smartphone or licensed for navigation systems or in-vehicle telematics systems. GMA provides audible alerts when a moving vehicle approaches an intersection at a dangerous predetermined speed. The objective of the application is to overcome driver distraction. (GMA licenses Navteq data for its application, although even Navteq's database does not include every single traffic light, but Navteq was the only available source of this data.) Of course, systems have been tested and are in development to allow a smartphone to actually be aware of the status of upcoming traffic lights. This is not something the GMA app is capable of, but is likely to be available commercially in the near future. Interestingly, an almost identical solution to GMA is in development within the IntelliDrive community using DSRC technology – instead of a map – to alert drivers to oncoming vehicles at dangerous interections. Of course, the DSRC technology, which is years from being deployed, has a wider range of implied applications in that it enables vehicle-to-vehicle and vehicle-to-infrastructure communication. In conclusion, government authorities will do well to do their best to avoid unintended consequences in their legistlative activities. The EU no doubt intended to speed the arrival of eCall by getting involved in the standards-setting process. All parties would agree today that the reverse has occurred. Similarly, in the drive to save drivers from distraction and the resulting fatalities, injuries and property damage, elected officials should be mindful of the distraction mitigating capabilities of smartphones. The source of the problem is the source of the solution.

Porsche is changing horses in the stolen vehicle recovery department, opting for Autotxt’s stolen vehicle recovery solution for the 911, Boxter and Cayman, according to industry sources. The change may be coming as a result of Autotxt’s new architecture which enables a single electronic control unit (ECU) to provide a wide range of vehicle diagnostic and remote control capabilities in addition to vehicle tracking. An official announcement is expected later this week. This single ECU solution from Autotxt has the potential to transform the relationship between the driver, the smartphone and the car, providing an enhanced opportunity to sell stolen vehicle recovery systems in the context of a low-cost smartphone-based telematics application. The technology has implications for customer and dealer relationships as well as for broader branding and marketing purposes. It also creates a new path for app distribution to drivers. Finally, the announcement shows Porsche taking one step closer to the inevitable introduction of telematics. Porsche has had a telematics system in place, ready to launch, for many years. The choice of Autotxt move the company that much closer to that decision while providing an in-place solution to satisfy the European eCall mandate. The Autotxt solution for Porsche - which will supplant the existing offering from Cobra Automotive - provides for both reactive and proactive stolen vehicle notification and recovery. In the reactive mode, the vehicle owner must notify the service provider, Autotxt, when the vehicle has been stolen. In the pro-active, or early-warning, application, the service provider is notified of any unauthorized vehicle movement at which point the driver is contacted. The Porsche application – which is a dealer install - may also offer the same functionality provided by Autotxt for Jaguar Land Rover and Aston Martin. Those implementations use the driver’s Bluetooth-enabled phone as the driver identification tag. Alternatively a keyfob can be provided. The system allows for up to seven Bluetooth driver IDs. Porsche is still evaluating this provision. The Autotxt offering is unique in the flexibility of its ECU. Like other modules coming into automobiles for related tracking, tolling and telematics applications, the Autotxt device is deeply embedded in the vehicle with access to the controller area network (CAN) codes. Autotxt expects to make available by Q2 2011 a smartphone application for remote vehicle control and diagnostics. Autotxt executives expect to be able to provide remote control functionality including remote activation of heating and air conditioning, windows, door locks and remote starting along with data logging and vehicle diagnostics. The multifunction ECU, therefore, can become an event data recorder as well as an eCall or bCall platform while also gathering and distributing data on overall vehicle operation available to either the driver or the dealer or both. The device could also handle trip reporting, battery status for electric vehicles and a wide range of location-aware applications. In this way, the car maker retains control of the in-vehicle connectivity experience in contrast to the widely reported terminal mode approach of conveying the smartphone HMI into the car. Autotxt expects to have versions of its system available for Android and other platforms by the middle of next year. The Porsche deal is global in scope as are the implications of the ongoing Autotxt development activities.

While major media and cable companies talk about four screen strategies the telematics industry is abuzz over the emergence of a three screen world. This was never more clear than at last week’s Telematics Update event in Novi, Mich. From OEMs to tier ones, software and service providers, the focus is on leveraging handsets, head units and the Internet to create closer and more profitable customer relationships. Companies on hand preaching the three-screen gospel included Nokia, Continental, Airbiquity, WirelessCar, RealVNC, QNX, Google, ATX, Tweddle Group Technologies and Parrot. The solutions demonstrated and debated point the way to a more connected experience in the car where the customer can access vehicle related information from outside the vehicle or on a phone or online when away from the vehicle. Even meta data provider Rovi and HMI supplier TAT offered their contributions to the three-screen vision. Nokia described and defended its terminal mode technology, a European-oriented campaign built around what some term a “screen scrape” transfer of a smartphone’s display along with a shift of device control to the vehicle HMI. Nokia intends to equip all of its smartphones with terminal mode technology by early 2011 and is working through the CE4A coalition to coordinate tier one head unit implementation of the technology throughout Europe, where Nokia’s market share is strongest. Using similar technology, RealVNC showed development tools for extending terminal mode technology into a wider range of devices and markets. While Nokia claimed to have two competing handset makers interested in the terminal mode solution, RealVNC’s more agnostic approach offers a suitable alternative. Airbiquity promoted its in-band modem technology by extending the platform to include a customized user interface, tied to the user’s mobile phone, along with app store functionality and location and user-relevant advertising messages. Airbiquity is increasingly taking on the role of a content aggregator, tying together content and applications in a single user interface. Airbiquity's Bluetooth-based approach was presented as a powerful and low-cost data-over-voice/packet alternative to packet-only solutions which require a payment for dial-up networking or SPP monthly service fees. Airbiquity estimates that OEMs deploying packet-only solutions will limit themselves to 20% of the penetratable market of which only 3-5% will have extra carrier service plan for BT DUN/SPP packet connectivity. On top of the data-over-voice solution, Airbiquity is layering its Choreo cloud service for both consumer and commercial markets. Airbiquity says Choreo allows OEMs to convert the car to an IT platform, creating a global infrastructure for content and service delivery. WirelessCar has also stepped into the content aggregator role, showing a clever vehicle-to-smartphone integration providing some basic vehicle control functionality and information access. The WirelessCar solution suggested the long-anticipated realization of a vehicle portal also accessible via smartphone for sharing vital vehicle data with the owner. OnStar has found this approach, with key vehicle status information, to be a valuable tool for driving customer traffic and service revenue via the dealer channel. To drive home its message, WirelessCar led a panel discussion with Ericsson and Cybercom, representing the wireless carrier and software integration perspectives on the implementation of a three-screen world.  Actually, WirelessCar has been pushing and demonstrating this concept for at least three years. Tweddle Group Technologies – the combination of Tweddle Group with UIEvolution’s former automotive division – is also looking to fill the content aggregator role. The company brings to the table its long history in the owner’s manual business – which itself is transitioning to electronic delivery – along with a relationship with Pandora. The Tweddle solution, which allows for the delivery of text and video content - via head unit or handset - related to vehicle systems has intriguing possibilities if integrated with CAN inputs such as alerts or other status messages. Tweddle has yet to marry these two sources of data, but the concept is certainly a powerful one. QNX has also envisioned sharing vehicle status information with the driver via on-board displays. The QNX LTE Car demo includes a “Virtual Mechanic” for providing the driver with images of vehicle systems and their status. Given Toyota’s recent disastrous recalls, the opportunity for these types of systems to catch on is strong. For its part ATX was demonstrating its new application for integration with Mercedes Benz’s TeleAid telematics service. The app provides for some basic vehicle control along with the ability to remotely send a destination to the vehicle’s navigation system. Continental’s AutolinQ concept may be a little ahead of its time in promising an on-board app store experience in an Android operating system environment. While car makers and suppliers have broadly embraced a variety of Linux distributions, Android is still running up against some industry prejudice over the issue of vulnerability to hacking and other perceived weaknesses. Industry buzz suggests that Android is being accepted and even specified in some RFQs, which is certainly a promising development for Continental. The growing Android momentum in the automotive, mobile and even consumer electronics markets suggests that Continental is on the right track. In support of its campaign, Continental announced an eco-system of solution providers contributing to the platform including Ygomi, Inrix, Navteq, Navigon and Deutsche Telekom. Continental will no doubt be flexible regarding these relationships if it means sacrificing a partner to obtain a new contract. But at least now the Continental vision has been clarified as a fully evolved proposition. Delphi executives attended the event, but did not demonstrate their own connectivity platform: D-Connect. Delphi has been vocal in its support of connectivity to Android devices, but resistance to building Android into the head unit. Since D-Connect has not been publicly announced it is hard to predict how Delphi’s final implementation will arrive in the market. Tier two Parrot showed chipsets optimized for mobile device connectivity including the latest Bluetooth protocols and Wi-Fi. Android also figures prominently in Parrot’s plans including some active programs, according to the company. Google announced additional “Send to” partners at the event – OnStar and Ford. For Google, the message for the industry is that it is a cloud-based world. Applications are no longer launched for desktop computers, they are launched on and for the Internet. Google’s recommendation is clearly that car makers facilitate cloud connections either on board or via mobile devices. OnStar, with the most powerful brand in the telematics industry, faces perhaps the greatest challenge in developing a cloud-oriented strategy. Not only must the company integrate its infotainment and telematics teams – long at odds over key applications such as Bluetooth connectivity and navigation – it must also reposition a brand identified almost entirely in relation to safety and security, not entertainment. The path is far from clear, but the promise of additional revenue from dealer service work to content consumption and, overall, a tighter relationship with the customer has car makers and their suppliers working overtime. All agree, at last, that the future lies in three screens. Leading the way are OnStar and Ford, each of which has defined its own three-screen strategy. BMW and Daimler are the next logical candidates to implement the handset-head unit-Internet approach. All of which points to common elements in future telematics solutions including: app stores (accessible via all three screens), vehicle control (across and between platforms), access to vehicle status information (all screens), content aggregation partner and back-end system provider, cloud-based content and services, and provision for multiple-handset compatibility. The emergence of these common threads are helping to clarify the future deployment of telematics systems speeding the delivery of in-vehicle connectivity. *Editor's note: Airbiquity executives suggested amending the strategy to FOUR screens. This week, Microsoft's embedded software division touted a FIVE screen strategy at the Fachkongress Elektronik in Ludwigsburg. Further insight: http://bit.ly/cMw4f1 - Solid Q4 for PNDs, but ‘Free’ Navigation is Shaking Up Monetisation - John Canali – Automotive Multimedia and Communication Service http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 - Nitesh Patel – Navigation and Location Opportunities http://bit.ly/8Yo4U6 - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel – Navigation and Location Opportunities http://bit.ly/6FC6W7 - Smartphone Market Developments Shaking Up Automotive Strategies - Lanctot - Automotive Multimedia and Communications

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.

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

OnStar is expected to bring out a mirror-mounted telematics device for the retail automotive aftermarket sometime early in 2011. The move is part of a broader strategy to take OnStar beyond the shelter of parent General Motors to tap into the wider market potential of safety and security and to finally and safely integrate entertainment technology with the telematics solution. General Motors’ OnStar division has yet to officially acknowledge its plans for an aftermarket product introduction in 2011, but the company has come close to affirming their existence with a report on CNNMoney.com that the company will “extend the OnStar business even beyond automotive.” The statement comes in the context of an announcement of a relaunch of OnStar before the end of 2010. As part of that relaunch new OnStar president Chris Preuss has been spreading the word that OnStar is looking to hire 30 or more engineers and developers to drive the revamp of the 14-year-old system. OnStar has declined to comment on any aftermarket plans. Preuss has moved quickly to put his imprint on the brand. Preuss arrived at OnStar with a long pedigree within GM as a senior communications executive both in the U.S. and Europe and has joined the broader effort within the company to project the brand into the world of social networking and closer connections with customers. For at least the past two months, GM has been building a team intended to bring an aftermarket OnStar product to the world of “big box” retail epitomized by Best Buy and others in the U.S. According to industry sources, the original plan was to launch before the end of 2010, but it now looks like a 2011 time frame is more likely. But OnStar’s plans likely do not end there. The reason for the aftermarket launch, and a potential move beyond automotive opportunities, is the potential crisis foretold by declining sales volumes for GM vehicles which are packaged with OnStar as a standard feature. Vehicle sales for GM are in the midst of a three-year swoon (down 21% in 2008, down 32% in 2009, flat in 2010) based on JD Power estimates. Assuming unchanged subscriber renewal and retention rates, the OnStar subscriber base – long reported to be 5.5M – is likely in the midst of a precipitous decline and in sore need of shoring up from other sources of subscribers. OnStar currently offers its services free for one year on most GM models, and then at subscription rates of about $20 to $30 a month, depending on the level of service, or $200 to $300 a year. Those numbers translate to more than $1B in revenue. OnStar’s new president claims a better than 50% retention rate among new car buyers – though the overall renewal rate is likely lower. Even if OnStar is maintaining a 50% retention rate, the diminished vehicle sales volumes are undermining GM’s ability to replace subscribers lost to attrition. Under these circumstances, maintaining the 5.5M subscriber base will be a challenge. OnStar executives privately aver that the division is and continues to be profitable, but a significant decline in subscribers is putting that profitability in jeopardy. Further, OnStar is famous within the industry for claiming to save GM hundreds of millions of dollars in warranty costs from catching vehicle problems early in vehicle life cycles. And Preuss is quoted in the CNNMoney report saying that OnStar is a factor in at least two-thirds of customers' decisions to buy a GM product. The challenge for OnStar goes beyond the decline in vehicle sales volumes. GM is competing against Ford and other OEMs that are emphasizing smartphone connectivity, which provides many of the same features and functions as OnStar. With so many functions shifting to phones customers are less inclined than ever before to add yet another subscription, even if it is for an embedded vehicle safety system. One of OnStar’s greatest assets, though, is its brand, which is why the group is looking beyond GM. Preuss says OnStar may return to offering its system to competing OEMs or may vary its business model to allow for sponsored content or services such as ad-supported turn-by-turn instructions. There are other scenarios for an OnStar move beyond GM including a commercial telematics solution for fleet or asset tracking, offerings for insurance companies to target pay-as-you-drive or teen driver applications, as well as, finally, buy-here-pay-here products for the sub-prime auto lending market. Given the urgency of the subscriber erosion situation, it is likely that OnStar will bring multiple solutions to market including, no doubt, a smartphone application offering with roadside assistance, concierge services and other location aware functions. OnStar has shown such a concept in the past but never pulled the trigger on introducing it to the market. Now, such an application is seen not only as a potential source of revenue but also as a brand builder and, of course, an extension of the OnStar platform. Preuss has sent mixed messages regarding the positioning of OnStar going forward. In the CNNMoney report he says the focus will be squarely on vehicle safety. In an Automotive News article announcing his appointment he stated that “fun” will be a priority for OnStar going forward. There is not doubt, though, that OnStar is being re-architected and repositioned to be competitive in a world characterized by social networking and device connectivity. What is most likely in the short-term, is an aftermarket offering, most likely in the form of an OnStar-equipped mirror. In fact, Gentex, which manufacturers an aftermarket replacement version of the OnStar-equipped mirror, stopped distributing its product through distributor Mito two months ago, at the request of GM. OnStar is likely taking control of the distribution of the product in preparation for mass market sales. An introduction of the OnStar brand into the retail automotive aftermarket is in keeping with growing interest in vehicle connectivity, navigation and tracking in general and telematics in particular. The Federal government has made known its interest in standardizing event data recorders in vehicles as a result of the recent Toyota unintended acceleration recall debacle. And companies as varied as TomTom, Hughes Telematics, Guidepoint, Rosen Entertainment and Pioneer Electronics are enabling roadside assistance capabilities in their devices and systems. Guidepoint is the single largest incumbent supplier of aftermarket telematics solutions. The company distributes primarily through car dealers and maintains its own call centers for roadside assistance and concierge calls. Guidepoint recently partnered with Rosen to bring an aftermarket head unit to the retail market with an on-screen button to access call center services. Hughes Telematics is another company looking to enter the aftermarket. Hughes has had an aftermarket offering ready for more than a year and is believed to be putting the team together to bring the product to retail. Given the fact that OnStar has been hiring executives to staff a regionalized sales force, the indication is strong that the group is target both consumer opportunities through retail and commercial opportunities. And an offering to be sold through expediters to competing OEM dealers is not out of the question. (After all, what can a Ford dealer do when the customer asks for OnStar by name?) The key difference, and main advantage, of OnStar remains the automatic crash notification – a function which may be problematic to offer in an aftermarket device. No one believes an aftermarket solution will be an easy sell at retail. But an OnStar-branded device will likely get serious consideration from consumers. The wild card for OnStar will be the precise nature of its reconfiguration and repositioning. The best news is that OnStar is not sitting back in the face of incursions by Google, Apple and others into the vehicle connectivity and infotainment business. The challenge will be for OnStar to demonstrate its ability to retain its industry leadership position and maintain or grow its subscriber base. The announced hirings at OnStar and relaunch indicate much more than a business model tweak for the group. Further Insight: http://bit.ly/cZOxuG - Global Automotive OE Telematics Market 2008-2016 - Joanne Blight

Reflecting Airbiquity’s rising star in the automotive telematics market, the company and partner Hitachi Automotive Systems, Ltd. have announced a partnership to provide telematics services for electric vehicles (EVs) globally. The announcement clearly positions Airbiquity – given its existing relationships with Toyota, Ford and OnStar – as the dominant telematics service provider of the future. The announcement emphasizes the global nature of the network and relationship between Hitachi Automotive and Airbiquity. The magnitude of this relationship is substantial, therefore, encompassing as it likely does, not only potentially the launch of the Leaf EV in North America but also perhaps lining up Airbiquity as a candidate to serve as the technology and infrastructure behind Renault-Nissan’s wider EV agenda including Europe, South America and Asia-Pacific. (Airbiquity had no comment on any potential relationship with Nissan or any other OEMs.) While Airbiquity is known for its so-called data over voice solution, the Leaf relationship is related to Airbiquity's Viaaq technology. Viaaq is serving as the back-end infrastructure for some Smart-grid implementations, paving the way for a next-generation role for Airbiquity in the telematics eco-system. The Airbiquity platform is well-suited to the task of supporting the needs of an electric vehicle to communicate vehicle location and battery charge. This relatively low bandwidth, data over voice, solution provides more than enough capacity both for battery-related information communication as well as safety and security and even eCall support. But the tie up with Hitachi is targeted at a broader IT infrastructure play. The only competing solution provider with an equivalent global footprint in telematics is WirelessCar, which already boasts relationships with Volvo Trucks, Volvo and BMW. In many ways, the WirelessCar solution represents a next generation answer to telematics service provision, emphasizing Internet protocol communications and voice-over-data technology. Where the global ambitions of Hitachi and Airbiquity may fall short is in extending the vehicle pipeline they currently offer to smart-grid applications and a deeper relationship with Nissan. The current point of leverge with Nissan derives from Hitachi Automotive's IT work in Japan in support of Nissan's telematics offerings in that country. The prospect of moving beyond "pipes to cars" and into the back-end systems represents a major leap for Airbiquity and puts the company in contention with IBM and other back-end integrators including Microsoft (Hohm) and Google. Unfortunately for Airbiquity, Ford has already announced its partnership with Microsoft for Smart-grid integration. OnStar has announced its intention to provide similar Smart-grid capabilities, but has not announced an IT partner. Hitachi and Airbiquity say their platform forms a central hub in the smart-grid network. They say the partnership paves the way for creating gateway infrastructures that can be linked with smart-grid systems. This will increase the footprint of both companies in the field of global connected vehicle services, and help automotive manufacturers worldwide quickly implement EV solutions, creating efficiencies and optimizing the costs of their service operations. Airbiquity has already made great progress in bringing the platform to a wider audience. The relationship with Hitachi also has implications for Ford Motor Company, for whom Hitachi/Clarion is a major manufacturing partner. Ford has implemented the Airbiquity platform as have OnStar and Toyota. All four OEMs have global ambitions for electric vehicles and telematics. Ford, for example, is expected to bring Sync to Europe soon. While several of these relationships are relatively new, it is fair to say that Airbiquity is poised to become the telematics service industry leader in the coming years. It is worth noting, however, how fleeting such leadership can be. It has been just three years since Continental acquired Motorola’s telematics business which at the time included contract manufacturing of the Ford Sync and OnStar modules. Within two years the OnStar business had shifted to LG Electronics and the Sync manufacturing relationship had shifted to Flextronics. But given its relationships with four of the largest car makers in the world, Airbiquity may have finally found  recipe for a more enduring position at the top of the industry. Further Insight: http://bit.ly/aIm4vK - Global Automotive OE Telematics Market 2008-2016 - Joanne Blight

Thanks to Meta Systems and its Octo Telematics subsidiary, the Italian market has become the de facto European proving ground for pay-as-you-drive insurance products. Octo Telematics pioneered pay-as-you-drive insurance in Italy and elsewhere in southern Europe with a connectivity box capable of providing tracking and stolen vehicle recovery services. As a result, it is no surprise that Allianz chose Italy for the launch of its Service Pack and Pay Per Use services more than a year ago. Many insurers in Italy provide PAYD products and services. By some estimates, as many as 800,000 drivers are enrolled in such programs. Allianz has set itself apart from the existing competition in a number of significant respects, but it is similar in also making use of a Meta System supplied “black box.” Both the Service Pack and Pay Per Use services from Allianz are enabled by this connectivity box. Service Pack offers customers eCall, bCall, theft notification and vehicle tracking applications via the Meta Systems box. The service is 99 Euro/year and requires the free installation of the box on the vehicle by a network of professional installers. The customer surrenders the box when the service is terminated. Allianz does not claim to offer stolen vehicle recovery, only theft notification. This notification is achieved through the use of an RF keyfob device, not unlike the way LoJack works in the U.S. If the vehicle is moved without the keyfob being on-board, the customer will be notified by Allianz representatives via the company’s wholly-owned Mondiale Assistance call center subsidiary. Vehicle recovery is left to the public authorities after the customer notifies the police. The Mondiale call center also support the bCall and eCall applications. Unlike the eCall services of competing insurance companies, the Allianze system provides for call center reception and processing of both eCalls and bCalls via an embedded SIM. Calls are activated manually via a single button or automatically in the event of a crash. Competing insurance companies that offer eCall-like features typically set up the application with the customer’s home or mobile phone number, with no connection to a call center. As a result, customers receiving these calls are responsible for seeking assistance for the driver. In this way, Allianz has put itself squarely in the eCall business for its Italian customers who choose Service Pack. Switzerland is expected to be the next market to be activated. The Pay Per Use product is an add-on service for customers who have already chosen Service Pack. The Pay Per Use service is targeted at low mileage drivers who can achieve savings of as much as 25% on their premiums based solely on the amount of driving they do – ie. mileage. Allianz is thought to be satisfied with the response thus far, though it has not been overwhelming. The 99 Euro/year price was introduced in 2009 as a promotional offer but remains more than a year later. The next steps for Allianz are to bring its solution to more European markets. The range of savings on the Pay Per Use product  will vary based on demographic and geographic calculations. The Allianz initiative shows a maturing in the PAYD market as location-aware insurance products begin to move into the mainstream. The Allianz offering is significant for its integration of eCall and bCall services along with theft notification all enabled via the customer’s phone, though the theft notification is enabled by an embedded connection.