Next week American Honda Motors will introduce its 2011 Odyssey at the Los Angeles Auto Show. The car comes equipped with what the company calls FM Traffic. This seemingly innocuous announcement marks a shift in the industry with wide ranging implications for both automotive radio and on-board traffic information.

Auto makers are confronting major decisions regarding content delivery to the car and the configuration of the center stack. The battle lines for content delivery divide over the question of embedding a telecommunications module or connecting the driver’s smartphone. Smartphone connectivity shifts the data plan burden onto the driver, while embedding allows wider latitude for vehicle data collection by the OEM.

The radio is the beating heart of the center stack and here a struggle is unfolding between and among traditional AM/FM technology, HD Radio, satellite radio and Internet radio. The battlelines are drawn over content delivery, personalization, localization, monetization and flexibility. Honda’s FM Traffic is based on RDS-TMC, a free (to the consumer) traffic data service delivered over the FM sideband. RDS-TMC represents the state of the art in North America for delivering accurate and timely information on traffic conditions. The Honda solution is unique in that it is supplied by the Broadcast Traffic Consortium (BTC), a nationwide group of broadcasters allied with Navteq.

The industry will have to wait until next week to see how Honda has implemented incident and flow messages, but it is likely that Honda and its supplier, Alpine, have added value to the traffic reporting proposition (http://automobiles.honda.com/traffic/). Alpine will also be bringing the BTC RDS-TMC solution to its aftermarket products. Honda is only the second North American OEM to deploy RDS-TMC from BTC, following Mercedes-Benz. More are expected.

The dominant RDS-TMC supplier in North America is Clear Channel, which is partnered with Inrix. The Clear Channel solution is offered by BMW, Volvo, Mazda and a few other OEMs. Honda’s decision is significant given that the company also offers Sirius XM’s NavTraffic service, which requires a monthly subscription. But Honda’s choice reflects several hard truths for the industry:

Truth #1 – The value of traffic data is declining. Once valued at $1/user/month, traffic data has declined in value to 25 cents/user/month or less at the supplier level. For the consumer, traffic information is perceived as free – especially since so much of it is readily available over radio and television broadcast sources as well as from Depts. of Transportation via the Internet. RDS-TMC traffic information is also free (to the consumer) and, therefore, fits this model and mindset.

Truth #2 – RDS-TMC traffic data is better than good enough. Anyone who has used RDS-TMC-equipped navigation systems in a heavy traffic corridor can attest to its accuracy and reliability. Satellite radio traffic information, by comparison, is not competitive – based on this analyst’s experiences. (Some European RDS-TMC data, Germany in particular, is the exception to this.)

Truth #3 – Traffic information services continue to evolve and improve and service providers must evolve along with them. While HD Radio deployment of TPEG traffic data services will be the next step, it will be followed quickly by solutions based on smartphone integration and, ultimately, embedded traffic data platforms that provide for Internet connectivity. All of this is bad news for Sirius XM. The company is already wrestling two alligators – a transition of existing Sirius users to XM service by 2016 (see http://bit.ly/bIWHJ6) and the introduction of Satellite Radio 2.0 in Q4 2011 (see http://bit.ly/bqiU7F).

While managing these two processes, the company is also justifying its existence on a quarterly basis before its investors as a public company.   Traffic data services are key to Sirius XM because they represent the most successful telematics service the company has been able to deliver. Unfortunately, because of the capacity limitations (traffic data for all cities must be delivered down a single connection leading to data being left out due to capacity limitations or delayed due to the carousel-like data transmission) and one-way nature of the satellite pipe, Sirius XM traffic is poor.  

In fact, Sirius XM traffic, based as it is on Navteq’s Traffic.com, has given Navteq’s data service a bad reputation – through no fault of Navteq’s. (This is not to be confused with the city-by-city audio traffic broadcasts provided by Metro Traffic.) Honda’s selection of BTC RDS-TMC is a shot in the arm for Navteq’s traffic team which is looking to bounce back from its reliance on Sirius XM.  The subscriber volume for satellite traffic has been poor as a result of the poor data. Some OEMs do not even offer satellite traffic for their satellite radio systems. This points to a wider problem for satellite radio. The company has yet to find a successful model for branching out beyond talk and music.  

Both Sirius TV (Chrysler) and TravelLink (Ford) are seen in the industry as failed services due to low subscriber volumes. Of course, the business models were also flawed. Sirius TV only offered three channels of rearseat entertainment, a fatal limitation, and most of the TravelLink services – for parking or inexpensive gas – are available on smartphone apps.  Now Sirius XM is setting the stage for Satellite Radio 2.0. In a report to LibertyMedia shareholders last month, CEO Mel Karmazin tipped his hand a bit by referencing the possibility of transmitting local movie times and/or red-light camera info to drivers via satellite radio. He also mentioned enhanced time-shifting technology, presumably from storing or buffering some satellite content.  Other reports regarding Satellite Radio 2.0 suggest more sophisticated search functions for finding particular artists or songs that may be playing at any given time across the voluminous satellite radio dial. Some industry sources say SR 2.0 is expected to have 25% more capacity. It’s not clear whether any of these SR 2.0 possibilities are true, possible or even compelling to future subscribers. 

But Karmazin has a compelling story for investors. He told them last month that OEM penetration of satellite radio as a percentage of new cars was 60% and that the number of satellite radio factory-enabled vehicles in operation in North America was approximately 30M and on a path to hit 80M by 2015. For this reason, the company is continuing to promote certified preowned vehicle programs for satellite radio re-activation – which is seen as a key to future growth.  Karmazin further notes that Sirius XM has some of the lowest subscriber churn in the media landscape (1.8%), has one of the largest subscriber bases (19.5M, second only to Comcast), and now captures 15% of overall radio revenue ($2.8B) vs. $15B for terrestrial radio, and ~$1B for Internet radio/music services. He also notes that satellite radio’s subscriber revenue is $2.8B vs. ~$300M for Internet radio which translates to per subscriber revenue (annual 2009 est.) of $136 vs. $1.25/user for Internet radio and $10-$20/listener for terrestrial radio. 

Conclusions  It’s worth noting that Karmazin made no reference to either HD Radio or to Sirius XM’s stated transition to XM by 2016. While the present looks promising for Sirius XM in the form of rising vehicle sales and the launch of new certified pre-owned vehicle programs, the long-term outlook is less rosy.  The wider deployment of competing and free traffic services should put the last nail in the coffin of Sirius XM’s telematics ambitions. Embedded telematics services and smartphone connectivity, combined with FM- and HD Radio-based solutions, will obviate the need for any Sirius XM data services.  A new front end to Sirius XM’s audio content will provide a short-term lift in allowing for easier access to specific types of music. And premium sports and personality content remain a demand wild card and, combined with nationwide reception, preserve the satellite value proposition.   But car makers are still not likely to integrate satellite radio into the core of their center stack platforms, meaning satellite radio will remain an add-on, particularly given ongoing system upgrades. In a matter of years, cars will be shifting to Internet connected solutions allowing for personalization and location awareness, two propositions with which satellite radio cannot compete. Additional insights: http://bit.ly/dniNxa - Navigation Heuristic Evaluation: Telmap5 – Schreiner – Automotive Consumer Insights http://bit.ly/95NCoW - Automotive DMB Digital Radio: Marketing Strategies an Increasing Priority – Blight – Automotive Multimedia and Communications Service http://bit.ly/dtRE5C - Automotive Telematics Services: Shifts in Pricing and Monetization Expected – Canali – Automotive Multimedia and Communications Service http://bit.ly/bwdwcW - Connected Vehicle and Vehicle Device Connectivity System Database by Feature, Region, and Price 2010 – Canali – Automotive Multimedia and Communications Service http://bit.ly/d0aLhq - Connected Vehicle Telematics: Car Maker Profiles – Canali – Aumotive Multimedia and Communications Service http://bit.ly/deumcd -# Traffic Data Quality Will Determine #Telematics Winners - Lanctot - blog - Strategy Analytics

In these times of economic travail it’s hard to believe that car makers are leaving money on the table, but they are and they have for many years. With car makers and carriers wailing about how to get consumers to pay for content and services a very obvious multi-million dollar (Euro?, Yen?) opportunity for add-on business for dealers and for the OEMs themselves has been left undisturbed – and Roadside Telematics has the answer. The amazing thing is that Roadside Telematics has been around beating a drum for its RoadMedic solution for more than 10 years – adding endorsements and winning awards – but failing to achieve much OEM recognition beyond Ford and Kia. The interesting thing is that this telematics solution requires no box, no call center, no fancy wireless connection, but it does require a smidgen of customer consent and a communications link to the National Law Enforcement Telecommunications System (NLETS) – the same communications network leveraged by LoJack and OnStar for their stolen vehicle solutions. The beautiful thing about RoadMedic is that it solves an age old problem for dealer and car maker alike: how to capture the crash parts and vehicle replacement business opportunity from new and existing customers that have gotten into accidents. A damaged or totaled car can mean a lot of things to a dealer, the vehicle owner or the car maker. A damaged or totaled car can mean a chance to sell a new car or repair an existing car (still under a lease or other financing) with genuine, authorized parts. It can also mean the opportunity to provide roadside assistance and/or a loaner vehicle both of which services are already provided for in existing warranties or OEM sponsored roadside assistance plans, though the customer may not realize it. In others words, it is a customer service opportunity. The primary purpose of the RoadMedic solution, as made clear by its name, is to deliver emergency contact information to police officers responding to accident scenes. The problem is that due to a wide range of circumstances the amount of time that elapses, on average in the U.S., before family members can be notified is six hours. Roadside Telematics has secured the support and assistance of the American Association of State Highway and Traffic Officials along with a variety of other health and safety affiliated organizations including: HIMSS, IEEE, AHIMA, IHE, CCHIT, HITSP and GHSA to encourage the OEMs to collaborate and cooperate on the development and deployment of a nationwide emergency contact locator system, like RoadMedic. RoadMedic allows dealers to reach out to customers, with their consent and at their request, in the event of accidents to provide necessary services thereby strengthening the brand message. It’s a patented business proposition that Roadside Telematics calls “reverse retailing.”  The Roadside business model is dependent upon customers providing their emergency contact information at the dealership point of sale. The business model calls for OEMs to pay Roadside Telematics on a per-vehicle basis which is included in the wholesale delivered price to the dealership, similar to the existing business model for OEM sponsored roadside assistance.It is hard to believe, but in an age of proliferating vehicle connectivity, cars can automatically notify public authorities of an emergency situation, but there remains no provision for expediting a connection to family members or other designated emergency contacts. OnStar rolled out a system nearly 10 years ago with a partner called Global Med-Net. But the Med-Net solution – customer endorsements of which are still visible on the company’s Website – was fax based and overreached somewhat by trying to integrate medical information. The Roadside Telematics solution is officially characterized as handling health information in the form of emergency contacts. The Med-Net solution, in contrast, sought to include important medical history. This complicated the point-of-sale paperwork and when combined with the fax-based portion of the notification process proved fatal to the program. It was terminated in 2002. The Roadside solution will allow police officers using NLETS to tap into both the RoadMedic emergency contact database and DMV databases to locate appropriate emergency contacts – providing a critical customer service. In fact, it is an even more reliable service than existing embedded telematics systems or even mobile phones because the notification is based on the police look-up of the VIN# and not on an unpredictable carrier connection.But it is the accident aftercare opportunity that is most intriguing for dealers. A customer will be able to call the dealer for accident aftercare services such as towing or to obtain a replacement car. Today, most customers are provided a wallet-sized Roadside Assistance card which is often misplaced. Worse, the average customer does not even think of adding the roadside assistance card to their wallet or purse. At point of sale the customer can opt in for this accident aftercare and, in the event of an accident, the dealer will get an accident vehicle sales lead – which is where the patented reverse retailing model comes into play. The dealer then has the option to contact the customer to offer to repair the vehicle, with authorized parts, or replace it and/or to provide a loaner vehicle. Roadside Telematics estimates net average OEM results from RoadMedic implementation as rising from $5.5M to $23.4M over the first three years with corresponding revenue gains for dealers. Best of all, the philosophical objectives of the service fit well with the safety and security objectives of existing telematics sytems. Of course, there are also insurance implications to the Roadside Telematics proposition. There is no doubt that insurance companies will always want the earliest possible notification of an accident. The good news for insurance companies is that they are usually the first ones to get the call from a conscious driver, but in the event of a more severe accident they may not be contacted right away. Some car companies, most notably Kia Motors, have embraced the Roadside model, though none have implemented it. Ford conducted a test of concept in Texas in 2004 and Volvo has committed to a test in Los Angeles. Roadside’s goal is to see the system put in place globally and allows that a typical OEM might even seek to reach out to existing vehicle owners to implement the system retroactively, while dealers may want to apply the system to certified pre-owned cars. Conclusion: As someone who has bought four cars in the past 7-8 years and who continues to receive service notifications for cars I no longer own or that no longer exist (due to accident) this analyst sees a powerful business proposition for dealers, OEMs and insurance companies. As a dealer, I want to know when my customer needs a loaner or replacement car or maybe even a repair. As a vehicle insurer, I want to know when that vehicle, that may not yet be paid for, is damaged or destroyed and/or when and if the driver is injured. In fact, if the vehicle is going to be repaired, I will want it repaired with genuine parts. As an OEM, I don't want to lose a customer who may have lost their vehicle entirely. Clearly, car makers, insurers and  dealers can all agree on the RoadMedic value proposition - the public authorities already have.

Driving has never been safer, with vehicle crash-related fatalities at an all time low in most areas of the developed world. But public authorities are pushing for zero fatalities and these efforts are helping to bring enhanced safety technologies to the market through a combination of embedded and off-board solutions. Still, not everyone agrees on how to make cars safer. The latest high-profile debate revolves around distracted driving and mobile phone use. Some argue that hands-free interfaces help drivers by allowing them to keep their hands on the steering wheel and their eyes on the road while interacting with their mobile phone. Others believe that no mobile devices should be in the car at all since they represent a driver distraction. Acknowledging the role of distraction (a suddenly loaded noun with many potent and potential meanings) in accidents, a purist might argue for an in-vehicle experience bereft of distracting displays. In this context, a shift to head-up display technology might make more sense than in-dash displays, MMI/i-Drive-type interfaces and touch screens. Even voice interfaces might take a backseat in this scenario. Companies such as General Motors and Microvision are among those leading the way down the head-up path. In an environment where regulators want drivers’ eyes on the road it is the only logical way to go. But the industry and consumers may not be ready for this leap. And with so much industry focus on in-car mobile phone use as part of the U.S. Dept. of Transportation’s Distracted Driving Initiative, the head-up display conversation is likely to be deferred, ignored, or simply drowned out. (It is important to note that head-up displays are no longer available from Buick or Cadillac, as recent dealer visits have confirmed. BMW is now the leader in head-up display technology in North America. The technology remains expensive and, generally, a special order item.) The USDOT’s Distracted Driving Initiative will see its second summit conference this year in Washington, DC, September 21^st. The goal of the event is to raise awareness of distracted driving resulting from in-car mobile phone use generally and texting in particular and to seek solutions to the problem in a public forum. Ford Motor Company stands in the eye of this storm with its high profile Sync hands-free system and the MyFord Touch upgrade arriving later this year. Ford is carrying the flag for hands-on-the-wheel/eyes-on-the-road driving in a struggle with Dept. of Transportation director Ray LaHood, the National Safety Council, the American Automobile Association and Oprah Winfrey, all of whom oppose the use of mobile devices in cars under any circumstances. (Ophrah may have changed her tune recently to allow for hands-free interfaces.) The debate raises fundamental questions regarding safety systems and automotive interfaces. Distracted Driving campaigners implicate the two-second glance to an iPod, iPhone or other mobile device as the culprit in more than a million roadway accidents (http://bit.ly/6uP3wu). All parties agree that there is a problem, but disagree on its nature and magnitude. There is also definite disagreement on the solution. And if a two-second glance is the culprit, what about all of those OTHER two-second glances in the car? Ford’s eyes-on-road-hands-on-wheel message could not be clearer and the company has backed up its position with its own research along with the results of both independent and industry-sponsored studies. Ford’s Sync and the unfortunately named MyFord Touch (which is intended mainly for voice, not touch, interfacing – in spite of the touch screen) represent the solution to a long-standing problem. Driver Distraction has been an issue confronting automobile designers from the very earliest days of the industry. The emergence of car radios in the 1930’s, for example, led to the introduction of push button channel selection to ease the distraction of locating stations with a dial. Multiple international standards-setting bodies and industry associations have long ago specified the appropriate viewing angle (30 degrees) of dashboard displays to minimize eyes-off-the-road time.  Designers regularly do battle over the question of touch screen or no touch screen, debating the finer points of changing focal lengths and distraction. Audi delved deeply into this issue before launching its touchpad interface. Yet all of the i-Drive and MMI-type interfaces still require a glance at a display in the car. Strangely, no one in the industry seems to be taking this distraction debate to its logical conclusion. If a two-second glance to an in-vehicle display is a source of potentially fatal crashes, the industry needs to be taking an entirely different direction. If displays of all kinds are the problem, then let’s do away with on-board displays completely. At the very least the industry should commence an initiative to explore a shift to head-up displays. But, wait, before we undo more than a century of HMI refinement let’s go back to the beginning. Highway fatalities are at an all-time low throughout the developed world and are especially low when indexed against the extraordinary increase in miles driven. During this time of declining road fatalities smartphone penetration has grown at an equally extraordinary pace. Smartphones, therefore, are not an obvious source of highway fatalities, but anecdotal evidence suggests these devices are not blameless. Ford is an interesting organization to find at the nexus of the debate. Not only has the company led the way in bringing voice interfaces into the car for safe operation of mobile devices, it has also pioneered the safe implementation of those interfaces. Examples of safe voice implementation by Ford: #1 Software development kit (SDK) enforces Sync constraints such as no keyboard entry or video while moving and list length limitations. This “policy management” layer is also being implemented within Apple’s iPod out, Delphi’s D-Connect, and Nokia’s Terminal Mode (http://bit.ly/b22buN), among other solutions. #2 When a vehicle is in motion, Ford locks out features and functions such as pairing a Bluetooth phone, editing or adding contact info, POI reviews, detailed sports scores or movie times, manual destination entry, all demo modes, keying in or editing messages, Internet access, external keyboard, editing settings, setting up short-cut buttons. #3 Ford limits list lengths (contacts/recent calls/POIs), the number of canned text responses and Sirius Travel Link information when the vehicle is moving. Ford’s recommendations for mitigating distracted driving include: #1 Passage of Jay Rockefellers’ anti-texting Senate Bill (http://bit.ly/aLMKL4) providing incentives for states to pass anti-texting legislation; #2 Primary enforcement of existing mobile phone bans; #3 Limiting mobile phone use for holders of graduated driver’s licenses – ie. teens; Ford also offers its MyKey technology for parents to limit vehicle speed, stereo volume etc. for teen drivers. #4 Education/public awareness campaigns – ie. Ford’s Driving Skills for Life (http://bit.ly/8TcMpn); #5 Elevate Alliance of Automobile Manufacturers’ “Driver Focused Telematics Guidelines” to regulatory status (http://bit.ly/ddCpRd); #6 Increase funding for research – handheld vs. voice; relative risks of distractions including cognitive; and review real-world driver compensation behaviors. The embedded, policy management side of Ford’s smartphone-based effort has been Volvo’s IDIS workload management solution. Not surprisingly, Ford is working on similar on-board solutions that take into account driving conditions and vehicle status based on messages on the vehicle CAN network including stability control and windshield wiper engagement, speed, and traffic. There is a small irony in Ford’s sale of Volvo given Volvo’s leadership in vehicle safety. The timing was rendered especially poignant given the National Highway Traffic Safety Administration’s shift in the middle of last year toward a focus on preventing rather than simply surviving accidents (http://bit.ly/9L6MFi). Volvo has been a leader in bringing technologies to market that anticipate and attempt to avoid accidents. IDIS (for Intelligent Driver Information System) is intended to shut down distracting in-vehicle functions – such as mobile phone access or even warning lights - in the presence of hazardous driving conditions – intersections, overtaking etc. IDIS takes into account such driving circumstances as acceleration, speed reduction, turn signal indicators, steering wheel angle, reverse gear engagement and infotainment controls. Its primary output is to delay/manage incoming calls and vehicle alerts. The next step for IDIS will be the integration of map data along the lines of map-based advanced driver assist system designs from Navteq (with partners Magneti Marelli and STMicroelectronics) and Intermap (Visteon). The integration of map data with vehicle safety systems will allow for curve over-speed warnings or pro-active braking when approaching sharp turns. One can expect more solutions to block mobile phone access – as in the case of Global Mobile Alert – in the proximity of hazardous intersections, school zones or rail crossings. Strategy Analytics research shows that consumers want safer cars. Recent Strategy Analytics surveys reveal high consumer interest in night vision, pre-crash safety, adaptive front lights, blindspot detection, adaptive cruise control, driver attention monitors, lane departure warning, parking assistance, V2V communication and automatic speed limiters. The challenge of course, is getting consumers to pay for these technologies. This reluctance to pay creates the conditions for Federal mandates. And Federal mandates are likely to change the public’s perception of safety from an exploding airbag to a pre-emptive braking experience. Auto makers are already responding to this shift. Infiniti, Toyota, Mercedes-Benz, Opel and Volvo are all actively touting active vehicle safety systems with the best and most advanced of these taking driving context into account. These systems are also increasingly taking distraction, inattention and even driver fatigue into account. Conclusion: In an ideal world, there would be no distracting displays inside the car to divert the driver’s attention from the eyes forward concentration on the driving task. In this ideal world, head-up displays would be widely deployed and traffic fatalities would be continuing their downward trajectory. We do not live in an ideal world. Therefore, everything else in the world of automotive HMI is a compromise. In the context of that compromise, vehicle systems that take into account driving circumstances and device connectivity are preferred to those that do not. This means that systems and devices – Apple’s iPod out, Nokia’s Terminal Mode, Delphi’s D-Connect – that provide a contextual policy management layer will be in demand. More importantly, with NHTSA shifting its focus to crash avoidance, perhaps the entire automotive industry will begin to rethink what safety is and what safety means. And when it comes to distracted driving, there will hopefully be a federal and industry embrace rather than a rejection of technological solutions such as hands-free interfaces. Additional Insights:http://bit.ly/94Mn1V - Delphi Emerges at SAE with Answer to Nokia Terminal Mode - Lanctot - blog - Strategy Analyticshttp://bit.ly/b5W8ZS - Nokia and RIM Push Into Automotive as ‘Apps’ Competition Mounts - Joanne Blight – AMCS http://bit.ly/b5XEJM - Advanced Driver Assistance Systems: Supply And Fitment Database - Kevin Mak - Automotive Multimedia and Communications Service http://bit.ly/cVcENg- Consumers Interested in Advanced Safety Features, but not at Current Price - Chris Schreiner - Automotive Consumer Insights http://bit.ly/b9oVAt - CTIA 2010: Distraction Mitigating Apps on Display - Chris Schreiner - Automotive Multimedia and Communications Service http://bit.ly/9BYNeR - Smartphones Bringing Safety Systems to Cars - Roger Lanctot - blog - Autmotive Multimedia and Communications Service

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

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

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

European service providers have given up waiting for the European Union’s eCall initiatives and mandates to deliver emergency roadside assistance across Europe. A growing number of private service providers are turning to existing technology in SMS-based alternatives to deliver eCall solutions without using the official eCall in-band modem technology. (They are, however, including the minimum data set portion of the standard.)

 

Volvo, Peugeot and BMW remain the only three OEMs with European eCall solutions implemented, using SMS technology. But third parties including insurance companies, automobile clubs and call center providers are stepping forward with solutions that will work with existing technologies. The latest launches include Allianz’s pay-as-you-drive offering, Allianz OrtungsServices GmbH’s LifeService offered in conjunction with AvD, TCS’s announcement of eCall service in Switzerland in connection with PSA, and ATX’s so-called “self-dispatch” solution.

 

These new systems are designed to provide eCall and bCall support throughout Europe and in the driver’s own language. But the language barrier is only one challenge to providing a pan-European eCall solution. The other challenge is the choice of connection technology. While the European Commission nominated in-band modem technology – sending data over the voice channel - as the standard for official eCall coverage, no mechanism was put in place for upgrading hundreds of public service answering points (PSAPs). The PSAPs must be equipped with the in-band modem technology to connect properly.

 

Qualcomm has stepped forward, as the winner of the in-band modem competition, to license its technology at no charge. But no action has been taken at the PSAP level, hence the emergence of private initiatives.

 

There is a bit of an irony in the focus on eCall. The volume of eCalls that are seen by the current providers number at most in the hundreds per year. This tiny number of incidents calls into question the value of the eCall mandate itself as a lifesaving technology, but this obscures the much more impressive number of roadside assistance calls, which number in the millions. (No one, including this analyst, is questioning the value of eCall services.)

 

The private service providers clearly recognize the value of the combination of these two services to their customers, hence the new offers. Lurking behind these initiatives is a battle for control of the automotive call center market in Europe. This multimillion Euro opportunity will grow in importance as more OEMs launch telematics services.

 

By some estimates, ARC Europe, European equivalent of the American Automobile Association, is the dominant provider of automotive call center support with more than a third of the market, followed by Mondial Assistance, Europe Assist and AXA. The Allianz PAYD offer is made in cooperation with Mondial, its wholly-owned subsidiary.

 

Allianz’s PAYD solution includes a module which provides a portfolio of services including eCall, bCall, stolen vehicle recovery, theft notification, and a hands-free Bluetooth interface. The range of solutions included with the device provide a more comprehensive offering reflecting the priorities of an automobile insurer including, most interestingly, a hands-free phone interface to reduce distracted driving.

 

From sister company Allianz OrtungsServices GmbH, comes the infrastructure for LifeService112, most recently added by Automobilclub von Deutschland (AvD). AvD, though older, is smaller than the widely known Allgemeine Deutsche Automobil-Club (ADAD), which is part of ARC Europe. With the new service, launched last week, AvD says it will be the first German automobile club to offer members GPS mobile phone localization for emergencies.

 

The new offer is made possible by the LifeService platform from Allianz. LifeService112 provides the technical platform for mobile phone localization for more than 90% of Germany’s public safety answering points. It is also compatible with both SMS and in-band modem technology.

 

Accident victims have previously been located via mobile phone cells with the accuracy depending on the number of radio masts. By contrast, GPS technology – independent from the network and available worldwide – can better pinpoint a victim’s location. Special software for the mobile telephone will make precise GPS tracking possible. Allianz OrtungsServices GmbH’s goal is to enable all European rescue coordination centers to access the LifeService112 system. In an emergency, the public safety answering point can locate every mobile phone by way of either radio cells or GPS. Allianz is seeking additional partnerships for the eCall/bCall service including, but not limited to, auto makers.

PSA has signed an agreement with Touring Club of Switzerland (TCS), announced at last week’s Geneva Motor Show to provide eCall and bCAll services for Peugeot and Citroen models sold in Switzerland beginning this month. In the event of an accident, an eCall SMS (with location data) is sent to TCS to process and contact the relevant PSAP. The system is a two-button solution allowing the driver or passenger to activate an eCall or bCall voice connection manually or automatically anywhere in Europe. TCS worked with Alabus AG to implement the solution and the hardware came from Magneti Marelli. The TCS call center will be able to respond in the driver’s language.

ATX, which has lost its European telematics service relationship with BMW, is making what may be the most radical proposal of what it calls a self-dispatching approach to managing eCalls from vehicles. The company’s announcement says its system will work with SMS or in-band modem technology and will make use of multilingual text-to-speech technology and Internet resources all of which may help to define an entirely new approach to telematics and call center support in Europe.

 

As Strategy Analytics anticipated, the market for digital maps has quickly shifted in the wake of Google’s entrance into turn by turn navigation. In the contrast to Google’s recent announcement to pull away from Tele Atlas as its primary map supplier, Microsoft (MSFT) and Navteq have entered into a “new chapter” in their ongoing partnership in what has been deemed as “a true 'win- win' for both companies” as stated in a recent press release.  While by no means a merger, the implications of this partnership could prove to be extremely far reaching.  Microsoft and Navteq/Nokia have technologies which extend into computer software, computer operating systems, mobile software operating systems, search engines, mobile hardware, and automotive platforms as well as the wealth of location-based data owned by Navteq.   This may prove even more significant as Google has recently leaked its intention to expand into the mobile hardware market. The most immediate benefit will be the use of Microsoft technology to create 3-dimensional, street level maps, which MSFT calls Streetside, for its Bing Beta Maps.  As more PNDs become connected, the ability to house 2D/3D maps onboard while storing street level maps off board will be an important selling point and help to differentiate PNDs from mobile phone navigation.  Street view maps are a fun application, but lack the accuracy for reliable automotive navigation.  Developing a seamless way to switch from street views to more accurate 2D/3D maps will help PNDs to better differentiate themselves from smartphones as PNDs provide better automotive usability. The growth of the connected PND market and smartphone navigation solutions can be seen in Strategy Analytics’ recently updated database listed below: Portable Navigation Multi-Feature Device Specification Database In addition to achieving better quality maps, Navteq has strengthened its position by gaining greater access to consumer markets for smartphones and connected PNDs, and could benefit from Microsoft’s strong position in the automotive market, especially in terms of volume cars equipped with Ford SYNC or Fiat Blue&Me and a system that is currently in the works with Hyundai.  While Google is a company with massive resources and a proven ability to flawlessly execute plans, perhaps the strength of its position in automotive and LBS has been overstated by many in the industry. Garmin should benefit from its close relationship with Navteq, while Tele Atlas/TomTom needs to evaluate its future and ponder potential strategic partnerships of its own.   Although Tele Atlas/TomTom has said that it will continue to focus on accuracy and innovation, these words seem more like hollow executive speak than a signal that Tele Atlas/TomTom believes its business model is still functional.  TomTom’s recent decision to slash the price of its iPhone application in half, from $99 to only $49, seems to belie assurances that everything is alright at the Dutch Company. In terms of Microsoft, the partnership helps Bing better target the mobile and automotive search market that Google seeks to dominate.  Strategy Analytics recently detailed Google’s competitive position in the report:  Competitive Position Analysis of Google in the Automotive Market Google has not been shy about its wishes to dominate mobile and automotive search, in fact, at Navigation and Location 2009 in San Jose, CA, a representative from Google stated, “it is advertising, not navigation that we are after.”  This makes search a vital component for deriving revenues from LBS solutions.  Microsoft is prudently looking to bolster its position against Google’s rapid push into LBS by partnering with Nokia. As reported here, by Telematics Update, the new Bing Maps will include a free voice-enabled search application, allowing the driver to access maps, directions, and traffic without compromising the wheel of their car.  The hands free application will cue the driver will visual signs rather than audio responses, thus giving Microsoft a potentially more powerful value proposition to potential advertisers as well as a solution that drivers may prefer. Still, the battle for dominance in automotive and mobile phone search is just beginning and long battles often make for strange bedfellows.   Google’s decision to pursue mobile phone hardware is certainly going to upset the likes of Motorola, who were relying heavily on the success of Android based phones.   This comes on the heals of pulling away from Tele Atlas and offering free TbT on Android, a platform on which Garmin is building navigation-centric Nuvifones.  While Google’s slogan, “don’t be evil”, may continue to resonate with consumers, these moves may have engendered distrust with potential strategic partners.      With many major players have yet to weigh in including automotive OEMs, Google may be viewed as too ambitious for potential partnership.      Meanwhile, Apple, a darling of many consumers, has yet to fully weigh in, but has not ignored LBS quietly acquiring Placebase last July.