The battle to dominate automotive connectivity has finally been taken on by Research in Motion (RIM) with the announced acquisition of Harman International's QNX Software Systems, a real-time operating system supplier focused on the automotive market. RIM had appeared to be sitting on the sidelines in recent months as fellow handset maker, Nokia, announced its terminal mode strategy and Apple grabbed multiple headlines for innovative in-vehicle connections from marketing partners. The acquisition of QNX gives RIM instant credibility as a leading automotive connectivity player and promises a spirited battle for automotive market share. The acquisition was announced this morning. The announcement says the two companies have reached an agreement for RIM to acquire QNX. The deal is subject to regulatory approval and is anticipated to close within 35-45 days. This strategic move is expected to further strengthen QNX's penetration in the automotive market and foster innovation for markets served by all parties. The move solves marketing challenges for both organizations. QNX's software is used in instrument clusters, head units and automotive Bluetooth solutions. The company had found tremendous success as part of Harman, which in recent years has come to dominate the luxury and near luxury segments of the automotive market. QNX is best known for its high-end infotainment software solutions used by Mercedes-Benz, Porsche, BMW, PSA, Hyundai and Chrysler, among other OEMs. As part of Harman, though, QNX's ability to break out into larger volume market segments was somewhat limited, and Microsoft had been winning most of the highest profile (and higher volume) automotive connectivity platforms including Fiat's Blue&Me, Ford's Sync and Kia's Uvo. At the same time, Apple was increasingly emerging as the automotive connectivity device supplier of choice for consumers and, by extension, OEMs as both the iPod and iPhone helped establish the iTunes App Store model as a compelling content, application and service delivery platform for the automotive market. It is true that some OEMs, such as Mercedes with its mbrace smartphone app, made allowances for Blackberry connectivity along with Apple's iPhone. But a growing number of OEMs, such as BMW, have been going out of their way to provide proprietary Apple connectors to enable the use of in-vehicle interfaces to access smartphone content. With few exceptions, Blackberry has been receiving no such support from OEMs and its devices remain enterprise-focused and ill-suited to automotive infotainment uses. While QNX's partnership with Alcatel-Lucent promises to target the complete spectrum of in-vehicle connectivity, a partnership with RIM opens up wider market opportunities for both QNX and RIM. The timing of the deal is ideal given that several OEMs participating in volume segments of the market have yet to launch branded, high-profile connectivity solutions. There is still time for a RIM-QNX collaboration capable of helping RIM vault into contention with both Nokia and Apple for automotive connectivity leadership. RIM also brings its unique global managed network added value to the proposition promising enhanced capabilities for in-vehicle applications that other handset suppliers are unable to match. It also presents a potential challenge to telematics service providers such as WirelessCar, Airbiquity and Telecommunications Systems. The importance of the in-vehicle connection has become increasingly important as consumers seek to use their smartphones in a growing variety of settings ranging from the home to the office and the car. QNX's existing position in the automotive market will instantly bring credibility to RIM's initiatives. It also introduces an entirely new value paradigm combining the virtues of device connectivity with the advantages of the managed network. The move is also a positive for Harman as it frees up the company to work with a wider range of software providers. Harman cannot afford to ignore the Genivi Alliance operating system, favored by its largest customer BMW. But Harman may also find it expedient to bid on Android- or Microsoft-based projects. Harman gains greater flexibility by decoupling itself from QNX. Of course, in reality the two companies will be virtually joined at the hip for the foreseeable future with a wide range of programs already underway and in the pipeline expected to extend for more than five years into the future. RIM, though, is likely the bigget winner. The company has been confronted with pressure to extend its operating system software to other industries such as netbooks, consumer electronics devices and, yes, automotive applications. The acquisition of QNX is an excellent door opener to these potential avenues of growth. QNX is in a similarly advantageous position to profit from wider market opportunities. Of course, while the move gives RIM a strong hand in contending for automotive connectivity opportunities it is likely that the merged company will continue to collaborate with Apple. QNX has a long history of supporting Apple in the automotive market including the most recent announcement of enhanced support for Apple iPods in the QNX Aviage Multimedia Suite.

Daimler has fulfilled the vision of replacing the traditional automotive head unit with the Apple iPhone. While some bloggers questioned the cost of the in-vehicle mounting device, which is yet to be announced in the U.S., the capabilities embedded in the device more than justify the price as well as validating Apple's design priorities. Apple's combination of touchscreen interface and consistent cross-generation hardware and software compatibility has created an automotive-friendly integration environment unmatched by RIM, among others. The touchscreen allows the iPhone to double as physical interface, with enlarged buttons for the automotive user, and the consistent architecture eases the usual automotive product lifecycle anxiety allowing Daimler to design the multifunction cradle. The iPhone integration for the smart developed by Daimler's Palo Alto Research Lab will arrive on the market in the U.S. and Europe during the second quarter. The application will be distributed via Apple's iTunes App Store, just as the Mercedes-Benz mbrace application is distributed. The corresponding smart Drive Kit cradle is an accessory which will be sold via the dealer networks - Penske in the U.S. and Mercedes-Benz in the Europe. The cost of the app in the US will be $9.99, which includes all infotainment features - including music and Internet radio access - except full navigation guidance and real-time traffic / fuel prices. The driver will still be able to see his or her position on a map on the device, which comes with Navteq maps. Also included is Bing off-board local search. The navigation upsell will be an in-app purchase for $49.99 which includes voice guided navigation plus traffic in the U.S. and Europe and fuel prices in the U.S. only. The smart Drive Kit does not yet have an announced price in the US, but in Europe will be 249 EUR + installation which may vary depending on whether it is being done on a new vehicle or as an aftermarket installation. The Kit is a combination of a cradle with hardmount next to the smart OE radio, integration harness to the radio, and an integration module providing: hands-free calling via external microphone and OE speakers, "smart" integration allowing the app to pre-empt the current audio source for navi prompts, as well as the ability to sense vehicle power to auto-save vehicle location for the Carfinder, and line-out audio integration for iPhone audio and charging. The positioning of the smart Drive Kit is quite different from mbrace and Mercedes has yet to announce a strategy to integrate this Daimler-developed solution either in the U.S. or Europe. But

Lately industry observers have been predicting the arrival of the automotive app store along the lines of the Apple model. The predictions seem to suggest that this is a simple and obvious proposition with a single business model and development path. In fact, it is a complex and evolving proposition with no single solution or magic bullet. Ford Motor Company and Mercedes-Benz have already learned how challenging this proposition really is. Both organizations have successfully developed – in-house – their own applications – an expensive, labor intensive, and time consuming proposition. But application development is only part of the challenge. Here is the complete list: 1.         Platform selection – Which handsets will be supported? Which carriers will be partners? Which operating systems (versions!) will be adopted? 2.         App store selection – Which app-store(s) will be supported or used? Carrier? Handset maker? Third-party? Own branded? 3.         Pricing model – Free? Free for limited time? Free with premium add-ons? Free with paid premium version? Subscription (monthly, annual, lifetime)? Pay per use? Sponsored or ad-supported? 4.         Application acquisition – Download? Activate on-board app? Access cloud-based service? Access device-based app? Dealer install? 5.         Handling of upates – Automatic wireless? Customer self-service with USB drive or direct connection of handset? Dealer? Recently announcing the sale of its second million cars equipped with Sync, Ford appears to be having the most success, early on, in the automotive app business. Ford appears to prefer to distribute its Sync application directly from its www.syncmyride.com Website. This makes sense since some of the applications, such as 911 Assist, require a dealer installation. The Website also provides detailed phone and media device compatibility information along with software upgrade information, application demos and FAQs. Most of the Sync services are available for free for the first three years, and some require a data plan. The data plan requirement reflects an industry-wide inclination to leave data charges to the customer. The provision of free applications to Ford customers reflects a market decision to leverage Sync to sell more Fords – a game plan torn straight out of Apple’s playbook. Based on Strategy Analytics analysis of the Apple business model, the app store is positioned either as a loss-leader or breakeven proposition. The primary purpose of the Apple app store is to sell more iPhones, iPods, iTouches and, now, iPads. Similarly, Sync is intended to sell Fords and, judging from the fact that 2M Fords have been sold with Sync the strategy appears to have traction with consumers. The Sync proposition also has traction with dealers and fits well with the existing Sirius Travel Link services both of which are enabled by Nuance speech recognition. Both offer an effective customer demo. At Mercedes-Benz, the mobile application is called mbrace, which is also the name of the company’s new telematics service, which replaces Tele Aid. While Ford’s Bluetooth-enabled application works with most Bluetooth-enabled phones, mbrace is compatible with a narrow list of iPhones (OS 2.2.1 or later) and Blackberries (4.5 or later) including GPS models for customers that want to access location-aware applications. The mbrace application can be obtained from Apple’s iTunes store or Blackberry App World and the only carriers that are supported today are AT&T and Verizon Wireless. The mbrace service is $240/year or $480/year (@$20/month) for mbrace Plus which includes concierge and other location-aware services. Of course, Mercedes could always vary this pricing depending on its marketing objectives. Mercedes has not yet positioned mbrace as a service offering designed to sell more cars. The immediate purpose of mbrace was to replace the existing telematics service provider and create a mobile phone integration platform. And since Mercedes is also focused on providing premium telematics services first, as opposed to simple infotainment tasks, the company does recommend that the customer have an unlimited data plan. This is not a big deal considering most smartphone customers are required to purchase data plans. Like Ford, Mercedes is interested in rolling out additional applications from third parties on a regular basis. Ford has gotten a head start on this effort with the release of its software developer kit. For now, Mercedes has been content to continue to do most of its development in house. The latest application from Mercedes, also for the iPhone, is intended solely for the Smart vehicle line and includes a full suite of infotainment applications. There is no announced plan to bring this application, which works with a separately purchased cradle, to Mercedes-branded vehicles. The real challenge for car makers is that the mobile market is a moving target. Market leadership between handset makers, operating system suppliers and carriers is a dynamic environment ruled by supplier innovation and consumer preferences. Ford’s choice of a combined Bluetooth and USB interface to enable Sync has made it easier to keep pace with the changing array of available phones. But testing for compatibility remains a substantial undertaking. (The current Ford Sync compatibility chart is nine pages long.) Apple’s influence on this market has been to add a couple of layers of complexity or, to be charitable, opportunity. By opening up its app store to third-party developers, Apple signaled a key turning point in the app store model. Developers are now able to choose the platforms they want to develop for based on criteria such as size of addressable market, amount of revenue share, variety of available revenue models, and ease of doing business. With its rapid rate of customer acquisition and the flexibility of its application revenue models, Apple has raced ahead of competing app stores in attracting application developers and applications. (Apple has even gone so far as to provide a tool for developers to target pricing tiers to specific date triggers: http://bit.ly/a4ETQw.) Strategy Analytics has estimates of revenue shares (available to clients) with the caveat that these percentages vary and change. Ford’s decision to offer Sync for free for an extended period of time along with additional free applications reflects the desire to build an attractive addressable market. While handset makers such as Nokia (with its Ovi store) and carriers can target massive user populations, car makers are more challenged in rapidly building a sufficiently large user community. Ford has a significant jump on competitors with its 2M unit addressable market. App stores are coming to the automotive market, but the path will be a crooked and expensive one. There is no single model that will work for every player. Ford and Mercedes are pursuing similar paths with completely different approaches. Every car maker will have to find its own way. Two things are clear: The investment in an automotive application store is a multimillion dollar proposition involving significant and ongoing costs in development, support and marketing. The potential upside, though, is the opportunity to redefine a brand and increase sales and market share. Ford’s apparent success to date is a demonstration that at least one version of the Apple model can work in the automotive market. Further Insights: Wireless Media Strategies: How Apple Changed the Market for Mobile Applications – David MacQueen – http://bit.ly/9KSuVL Automotive Bluetooth: Profile Strategy Key to Infotainment Success – Mark Fitzgerald – http://bit.ly/9qEXbU CES 2010: The Arrival of Converged Automotive Multimedia Products – John Canali – http://bit.ly/9gp4yo

SYNC sells. Ford’s SYNC connectivity and infotainment system, built on the Microsoft Windows Embedded Automotive software platform, has reached the 2 million unit sales mark 10 months after Ford delivered its 1-millionth SYNC-equipped vehicle in 2009, the first SYNC systems were delivered in fall 2007. SYNC’s evolution is paralleling the consumer’s evolution in a connected world. Ford’s latest version of SYNC that debuted at CES 2010 presented a solution dubbed MyFord Touch, which truly shows the convergence of consumer electronics and the automobile. As consumers interact with the web and media devices with more regularity each year, Ford seeks to help the consumers replicate this behavior in the car. Examples include:

• Consumers have apps stores for their smartphone; Ford opened a market for car apps.
• Consumers have come to value internet radio, twitter, and social networking sites; Ford has worked with Pandora, Twitter, and Stitcher to make automotive applications.
• Consumers have become accustomed to being able to record and rewind live TV, Ford had come up with a solution where Sirius XM can be recorded and played back.
• Consumers are used to 5 way controls popular on iPods and numerous other consumer devices; Ford has employed similar technologies in its HMI.
• Consumers often look up driving directions while in front of a computer, SYNC users can now send MapQuest directions to their cars and the SYNC system will navigate the driver to their destination.
• Consumers like shopping at iTunes, users can now tag songs for purchase through HD Radio and the SYNC system.

SYNC adds value to vehicles. Ford data analysis indicates that SYNC-equipped models of the 2008 Focus are worth more than those without SYNC. After one year in service, the SYNC-equipped models sell for a $240 premium on average. This premium over a non-SYNC-equipped vehicle indicates consumer demand for SYNC is real. Ford has delivered the message to consumers that SYNC is a desirable product that makes the in-vehicle experience better and is worth a premium price. The upgrades to SYNC for the 2010 model year including the addition of MyFord Touch, Pandora, Twitter and Stitcher apps, iTunes tagging, mobile Wi-Fi hotspot capability, MapQuest directions and other features and applications indicate that Ford intends to protect its lead in the connected infotainment market despite competition from most every other vehicle OEM developing or offering competing solutions. http://media.ford.com/article_display.cfm?article_id=32262

When is Internet radio not Internet radio? When it’s a music service or programming guide. That’s one of many problems with Internet radio, nobody seems to understand what it is, which means marketing messages are confused and confusing. But the market leaders are finding success in spite of themselves with music service Pandora boasting a subscriber base of 45M; competing service provider Slacker claiming 15M; and programming guide supplier RadioTime reporting 40M listening sessions/month and rising. Pandora has captured the imagination of car makers and the creators of automotive infotainment systems. Both Ford and QNX have announced plans to bring Pandora to in-vehicle solutions. Nearly everyone in the automotive industry considers Pandora to be so-called Internet radio. Even Pandora calls itself Internet radio, but, in fact, it is a music service, not unlike Napster and Rhapsody or even iTunes. Note that no one would normally refer to Napster, Rhapsody or iTunes as Internet radio services – yet they perform many of the same functions of Pandora. The point is important to understand because there is a battle for the ears of listeners “trapped” in their cars. Today, these ears have more choices than ever before including traditional AM and FM, satellite radio, digital radio, recorded content (disc-based and digital) and streaming content from music services, podcasts, and, yes, Internet radio. And Internet radio is presenting an emerging challenge to music service providers. With vehicle connectivity being enabled via broadband and narrowband technology embedded or carried-in, consumers have access to virtually the entire conceivable spectrum of live and recorded content. The newest arrival, following Pandora’s debut, is RadioTime, an Internet radio programming guide. RadioTime arrives on the scene just as engineers and programmers are facing the monumental challenge to enable access to these services and their content. The objective is to organize and manage that content in an intuitive manner that can be easily and attractively communicated to consumers. The challenges are formidable. Slacker, a music service that competes with Pandora, claims millions of songs for a library 5x the size of Pandora’s and based on direct relationships with the “labels” responsible for the music. Slacker’s content is packaged in 120 genre stations and 10,000 artist stations. Both Slacker and Pandora have their own strategies for packaging their music offerings, with Pandora’s based on the increasingly ubiquitous thumbs up/down approach in contrast to Slacker's stations. And neither of these companies possess the licenses necessary to operate outside the United States and Canada - even Pandora is not available in Canada. This is where RadioTime comes in. RadioTime, the Internet radio programming guide selected by BMW for its Mini integration, provides access to 65K Internet radio stations from around the world. And the access to those stations is global, which helps to explain BMW/Mini’s choice. For in-vehicle delivery of these new music experiences the first steps are apparent in the latest iterations of Microsoft Auto which provide for song look up by voice regardless of source. QNX has also shown Internet radio integrations though generally focusing on Pandora – a lead that has been followed by Tier One suppliers (and QNX customers) such as Visteon, Continental and Denso, all showing their Pandora solutions at recent trade events. The importance of BMW/Mini’s RadioTime announcement revolves around the fact that RadioTime is a programming guide for Internet radio and is NOT a music service. RadioTime offers one of the first radio programming guides, focused as it is on Internet radio, yet it also includes non-Internet radio sources such as traditional FM and digital radio. RadioTime’s competitors include Reciva and vTuner, which have comparable offerings on a much smaller scale and lack regular FM or digital broadcast content. The only element missing from the RadioTime proposition is the personalization capability that distinguishes Pandora, Stitcher and others (ie. the thumbs up/down aspect). But RadioTime does uniquely offer localized content with local stations broadcasting audio and text in the local language. It is still early days in the Internet radio and music service business as far as automotive and mobile app implementations are concerned but there are already dozens of mobile applications available for nearly every mobile platform. For music services the business model revolves around subscriptions, paid downloads and advertising. The business models range from free (often with advertising) to paid (without advertising) and include sales of music and other access privileges such as caching or "skipping" songs. The major music services are Slacker, Pandora, Rhapsody, Spotify, iTunes and Napster. The major programming guides are RadioTimes, Reciva, vTuner and Radio Locator. The available Internet radio stations include: iHeartradio, RadioParadise and a host of individual and bundled stations ultimately encompassing the entire 65K stations available worldwide. Mobile radio apps include Flycast, Stitcher, Radiolicious, and WunderRadio amidst a long and growing list. Most listeners enjoy these services over their personal computers or televisions but a growing population are accessing content via mobile devices and, soon, will be plugging into Internet music sources via embedded systems. For now, though, car makers are preferring to maintain an arms-length relationship with these services by enabling access via a customer’s own phone and data plan. To achieve this requires either streaming Bluetooth connectivity via A2DP access or a hardwired connection. Slacker stands out in this crowd as offering a third path of storing content for later play instead of streaming, not unlike some of the portable satellite radio devices currently available. Slacker can be streamed or cached, giving it a unique advantage in the market. Despite this unique position, though, Slacker has yet to garner any visible design wins in the automotive market, though it is available on most popular smartphones. Ultimately, the market will favor low-cost Internet radio and music service solutions. This means that the battle today is between content aggregators such as RadioTime, Flycast, Stitcher, vTuner and Reciva and their ability to compete or co-exist with music service providers. Whatever the outcome, drivers with smartphone applications stand to benefit handsomely. For additional insight see: CES 2010: The Arrival of Converged Automotive Multimedia Products - John Canali -  http://bit.ly/9gq4yo Automotive Bluetooth: Profile Strategy Key to Infotainment Success - Mark Fitzgerald - http://bit.ly/9qEXbU Internet Radio: Ready for Prime Time - Mark Fitzgerald - http://bit.ly/ZBXzd

As an emerging low-cost platform for distributing content and services to passenger vehicles, HD Radio technology has been sneaking up on the automotive and consumer electronics industry for about six years. In that brief time, the company has created a minor sensation in spite of the fact that most of the added value elements of the technology have yet to be deployed and tier one suppliers are only now beginning to master the user interface for automotive implementations. Suffice it to say that iBiquity Digital has succeeded in spite of the limitations of early product executions. But the next wave of product promises more dramatic gains as OEMs bring their interfaces up to speed and hardware makers deliver on the enabling technology for conditional access and other value-added services. IBiquity Digital has overcome the classic chicken-and-egg quandary, simultaneously convincing device makers and broadcasters to take a leap of faith and get on board the HD Radio technology express. In the six years since beginning its campaign, iBiquity Digital has recruited thousands of radio stations and their broadcast company parents to add the HD Radio signals, convinced portable and home electronics hardware makers to bring devices to market, and drawn in more than a dozen car makers to add HD Radio technology to their line-fit options portfolios. Today, in the U.S., there are 1,967 stations broadcasting using HD Radio technology in 250 U.S. markets including 197 of the top 200, reaching 247M listeners. In addition, there are 1,128 multicasts, additional stations within the existing HD Radio bandwidth, with nearly equivalent reach. There are dozens of home and aftermarket automotive systems equipped with HD Radio technology – including an iPhone add-on and an integration on the latest Microsoft Zune. Significantly, many if not most of the aftermarket automotive systems include HD Radio technology as standard whereas competing satellite radio capabilities are typically optional. Within the automotive realm, HD Radio technology has rocketed from being available on two brands and seven models (none of them standard) in MY07 to 16 brands and 87 models (34 of them standard fit) in MY10. The outlook is for 19 brands to be offering HD Radio technology on 122 models in 2012 with 65 of those models offering the technology as standard. By now, most people in the electronics industry are painfully familiar with the extended product life cycles and correspondingly slow decision-making in the automotive industry. In this context, iBiquity’s success has extraordinary. The rapid rise, however, has spawned poorly executed user interfaces with inscrutable and non-intuitive designs. (Doubly unfortunate is the fact that some of the poorest HD Radio interfaces are offered in high-end luxury vehicles.) IBiquity provided limited user interface guidance at its inception, but has since taken more of a position in providing suggested device interfaces. Customers are still left to their own preferences, for the most part, though industry participants will be wise to heed any direction from iBiquity. In the end, if customers cannot fathom the interface the added value will be lost. As HD Radio technology moves into the next phase of its global campaign – and make no mistake that the effort is a global one – it is worth taking a look at the services that are Current services include: Program Service Data – Song, Artist, Album, Genre, Comment, Commercial HD2/HD3 Stations iTunes Tagging Album Art – Station logo, Album art, Advertising Premium Content – Data, Concerts and sports programs, Opt-in Adult content, etc. Conditional Access Additional services in development include: Program guide Music tagging Advertisement tagging As for the scope of iBiquity’s efforts and ambitions they indeed span the globe. Countries that have adopted HD Radio technology with nationwide implementation include Puerto Rico, Panama and the U.S. Countries that have adopted the technology with regional operation include Mexico and Brazil. Countries that are characterized by iBiquity as being in testing with advanced interest include Canada, Argentina, Chile, Romania, China, Vietnam, South Korea, Uruguay, Colombia, Poland and the Czech Republic. The company describes several European countries as having a strong interest in the technology. If iBiquity has had this much success with a limited offering delivered in hastily configured packages, one can only imagine the results that await the company as the second and third generation products arrive with added value services and enhanced interfaces. Among the most remarkable executions demonstrated recently at the Consumer Electronics Show was the HD Radio integration in the MyFordTouch, just a hint of what is to come.

Leveraging its TotalGuide interactive programming guide and Lasso and Connected Platform networking technology, Rovi is seeking to become master of all content.  The company wants to own the interface between the user of audio and video content and the process of discovering and acquiring that content regardless of source or device platform. At the CES show in January, the company was touting new content partnerships with Showtime Networks, ZillionTV and Rhapsody in the U.S. along with a list of European based firms.  Existing sources include CBS, Blockbuster, YouTube and Roxio CinemaNow.  Rovi’s technology is built upon, among other things, the growing metadata and user review databases of its own AllMediaGuide and partner Flixster, along with WideVine’s digital rights management solution.  The company claims more than 25 million U.S and 50 million worldwide households using its interactive programming guide which also serves as an advertising platform. While Rovi’s role in the automotive market is less obvious, the company is more than three years into a drive to resolve content and rights-related challenges to accessing media and content from multiple sources conveniently and legally on mobile devices and in cars as well as in homes. Rovi’s role in the automotive market is growing as in-vehicle device interfaces such as USB ports and Wi-Fi connections proliferate along with external connections via embedded modules or smartphones.  More content and media are being brought into cars and Rovi is coming along for the ride.  Current partners in the automotive segment include Kenwood and NXP. Rovi’s technology is also used by Apple’s iTunes store among many other online content sellers. Introduced late last year and currently available, Rovi’s automotive solution combines its Lasso and Connected Platformm technology for the automotive market and includes:

• Media Lookup: the ability to use Rovi's metadata library to identify, tag and manage digital content.
• Rich Entertainment Metadata: information on a variety of music and movies, supports multiple content types from CDs, digital files, DVD, Blu-ray Discs.
• Software Update: periodic updating of embedded databases via removable media or home network connectivity.
• Content Transfer: transfer of audio files and metadata to the vehicle from standards-based devices on a home network.
• Device Sharing: interoperability of portable devices via USB and standards-based connectivity.

To achieve the necessary connectivity, Rovi is supporting the Digital Living Network Alliance’s (DLNA) new guidelines for the service provider market that will enable consumers to play back and share commercial video and music across DLNA Certified devices. DLNA certified devices are proliferating in the PC (Windows 7), set-top box, TV, Blu-Ray, and mobile device markets, paving the way for smoother access to content from multiple sources. In the consumer electronics market, Rovi wants to become the default programming guide for the next generation of HDTVs, Blu-ray players and set-top boxes.  The importance of this effort is that the company is bringing together both in-home consumer electronics content access and mobile device access.  TotalGuide will integrate cable and broadband video content side-by-side, in a single unified interface in the home, but can be expected to deliver a similar solution in mobile environments. This means, Rovi will help enable the discovery and distribution of content, regardless of the delivery source or device platform.  And Rovi also has the user reviews and metadata from partners like Flixster to offer social recommendations for video viewing.  Competitors include Vudu, Boxee and TiVo, among others, but Rovi arguably has an edge with its unique combination of content, rights protection, metadata, and user reviews. And Rovi is the only player pursuing automotive opportunities.

Rovi’s rights protection technology comes from Widevine’s video optimization and DRM solutions.  Widevine is a provider of adaptive streaming, interactive DVD/Blu-ray and DRM technologies to Internet content services as well as cable, satellite and telecommunications companies.  Rovi says that by working with Widevine, consumers using its TotalGuide will be able to have access on their TVs to more content, such as movies and TV shows, from more providers.  At the CES show, Rovi showed its new Media Management content management solution.  Media Management helps manufacturers of PCs, set-top boxes, mobile handsets, and network-attached storage devices identify, tag and organize digital music, videos and photos by attaching descriptive metadata to the asset for easier filing and searching..

No, not really. But it seems as if that headline could be written any day now. Apple’s influence inside the car has become as pervasive as Google’s influence outside it. Apple’s iPods and iPhones have fundamentally altered the automotive audio experience and are speeding the demise of the in-car CD player.

 

The electronics industry may be abuzz regarding the impending arrival of the Apple “iSlate” tablet computer, but auto makers and their suppliers are wrestling every day with the impact of hundreds of millions of iPods and millions of iPhones. Even telecommunications companies have felt Apple’s touch, causing them to re-evaluate flat rate data plans as iPhone users tune in to Internet radio and streaming video applications en masse.

 

But Apple’s influence began 6-7 years ago. Apple’s iPods arrived on the market around the same time aftermarket companies were toying with the idea of removable and dockable storage drives in cars. Companies from Seagate to Kenwood, Phatnoise and Rosen Entertainment, among others, dabbled in this area to the extent of bringing products into the marketplace only to discover that the iPod had become the de facto portable storage device for in-vehicle use.

 

A similar reality is unfolding today as car makers seek to bring Internet access into the car via embedded modules, while iPhone users are bringing Internet applications to the car via their iPhones. Today, iPhone users can access Internet radio, podcasts, navigation and location-related applications all from their smartphones. In fact, many car makers provide proprietary Apple connectors with their new cars. (The salesman who sold me my car last year provided these connectors - which are now jammed into my console for storage - even though I use a Blackberry.)

 

We have Apple to thank/blame for the proliferation of AUX IN and USB connectors in cars and, soon, we may have Apple to thank/blame for the demise of the automotive CD drive. For now, CDs persist out of convenience, low cost and wide consumer acceptance. But retail sales are in freefall even as downloads continue to gain, particularly, of course, for iTunes. When it comes to low cost, a properly connected iPhone delivers as much value as the average multifunction head unit – and more.

 

The latest iPhone vehicle connectivity developments revolve around transferring control of the device to the in-vehicle HMI. Most Tier Ones have mastered this task enabling steering wheel and other controls to manage iPhone functions. The next step in the works is to transfer the images displayed on the iPhone screen to the center stack display, if there is one. But the convergence of Apple devices and automobiles will continue especially as the installed base of devices continues to grow.

 

That installed base fuels a massive aftermarket. Apple’s presence in the mobile electronics industry was never more obvious than at the Consumer Electronics Show earlier this month where dozens of companies showed devices for connecting or mounting Apple products in cars. The Apple automotive aftermarket alone is probably bigger than the rest of the automotive aftermarket combined - roughly speaking.

 

Rest assured that OEMs and their suppliers are laboring furiously to get out in front of Apple’s next move that may influence the car buying public. Maybe the iSlate will alter the automotive aftermarket in some fundamental way. Is an Apple head unit next? Not likely. Not now, after Apple has forever altered the in-car audio experience. For the foreseeable future, every head unit maker will have to make a pit stop in Cupertino before bringing their next product to market.

 

According to GPS Business News this week “TomTom unveiled some interesting data about the trend of the Personal Navigation Device (PND) market in Europe and in the world during a press conference in Paris, France. For the first time the PND maker is not expecting this market to grow over the next five years”. Is ‘The future of PNDs in Europe: less revenue, more profitability?

http://www.gpsbusinessnews.com/index.php?preaction=view_nl&nl=56901&id=7796917&idnl=56901

This conclusion supports Strategy Analytics Sep-09 analysis of quarterly PND metrics and market share tracker, which shows a marked increase in Q2-09 operating profit per PND sold for both TomTom and Garmin:

http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5010

A key factor for improving profitability for PND players is to widen the distribution channels for navigation solutions. Distribution of navigation solutions to phones is now emerging in 3 clear areas; devices with pre-install, services activated with wireless operator; and apps that can be downloaded from apps stores/direct from the navigation provider. Market positioning of the phone focused navigation solution providers is currently different from traditional PND vendors, and some general clusters of companies are emerging: device pre-install providers – Appello, deCarta, Route66; wireless operator services – TeleNav, NetworksInMotion, TelMap, ALK, Wayfinder; with navigation providers also distributing directly online and via apps stores.

Nokia, by far, has the lead on the pre-install maps and navigation app market, leveraging from its ownership of Navteq, but SonyEricsson is building activity too. For other key wireless devices vendors including LG and Samsung, the issue is about providing desirable applications to show case handset capabilities and making their handsets more relevant and appealing to consumers. It is also about not being left behind by their competitors. If Nokia and Sony Ericsson are offering pre-installed turn-by-turn navigation then LG and Samsung will also be under pressure to take a lead on device pre-installed maps and navigation apps too. This presents significant new navigation apps opportunities.

We are starting to see a shift from leading PND vendors into phone navigation solutions e.g. TomTom, Navigon and ALK CoPilot apps are now available for iPhones via iTunes, with a Garmin solution expected, and Garmin is launching the Nuvifone G60 in the US in Q4-09. But the device pre-install market is still very fragmented across the regions and the traditional PND players have not developed partnerships with wireless operators.

Yet there are some brand and quality issues surrounding the navigation that are available pre-install, via a wireless operator or a downloaded app. A consumer might not know, remember, or just not care, whether the navigation system they installed on their mobile was from their operator, their handset manufacturer, or from a third party; and the navigation brand may easily be subsumed by the overall brand of the device/operator. This opens up opportunities for trusted, well known consumer brands with high quality and robust navigation solutions.

TomTom and Garmin have strong consumer brand perceptions in navigation and this will likely be leveraged more widely into the device pre-install and wireless operator distribution channels for navigation.

This blog summarizes discussions following the recent complimentary Strategy Analytics webinar ‘Navigation Usage Across the Product Platforms’

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