At CES 2011, OnStar made headlines showing an aftermarket telematics solution which is now called, FMV (For My Vehicle).  Along with this announcement, OnStar also announced that it had secured the retail giant, Best Buy, as a distribution partner.  Securing Best Buy was a key win for OnStar, but questions remain about the extent to which Best Buy will promote FMV, how much knowledge Best Buy's staff will have about FMY, and if the staff can sell this technology to consumers?  While Best Buy was a key win for OnStar, Best Buy's motives seemed a bit unclear.  Electronic stores have been moving away from aftermarket automotive systems for a while.  These systems take up key real estate on the floor as well as additional real estate and staff for installation bays.  Even PNDs, which do not require installation, have been receiving considerably less floor space as they were quickly eclipsed by tablets as the new hot item.   Furthermore, the move seems a bit strange given Best Buy's recent push into the mobile handset market.

In contrast to OnStar, Hughes Telematics has targeted other channels of distribution.  In July, Hughes announced its partnership with American insurance company, State Farm, to bring insurance telematics to consumers.  Today, Hughes announced another breakthrough partnership, this time with AAA Club Partners.  AAA Club Partners is holding company comprised of 10 American Automobile Association (AAA) Clubs and the combined membership is almost 12 million across 20 states.   Unlike FMV, Hughes' solution can be self installed and features two-way voice connectivity for emergency services, enhanced AAA roadside assistance, and hands-free calling as well as vehicle diagnostics, location and speed alerts, vehicle diagnostics, and stolen vehicle locations assistance.  The solution offered by Hughes is also less intrusive, as it does not require replacing the OEM installed mirror, and instead plugs into the OBD-II port.  

The approaches to distribution differ in many ways.  Hughes appears to be creating strategy partnerships with organizations that are potentially stakeholders.  These companies are not just trying to profit on hardware and service but differentiate their service and enhance customer experience.   Furthermore, these organizations understand their customer base and can attempt to entice the right consumers into adopting telematics services.  This approach is very focused and alligning interested stakeholders could help reduce cost for all parties.   Given that OnStar has spent considerably on advertising to build its brand, perhaps its broader approach will work out, but Strategy Analytics' remains dubious given concerns about the current cost of FMV and early empirical data suggesting little consumer interest.  

Additional Insights:   OnStar: Time to Hit the Reset Button?

State Farm, Hughes Raise Usage-Based Insurance Bar

Yamei Puts Dealers in the Telematics Driver’s Seat

Usage-Based Insurance Brings New Competitors to Telematics Market

Technorati Tags: Ford,Safety,Hands-Free,Voice Recognition,Nuance Ford Motor Company’s Dr. Louis Tijerina, senior technical specialist, research and advanced engineering, is worthy of special mention following Nuance’s Automotive Summit last week for his concluding presentation. In his comments he pointed out the overwhelming conclusions from the dozens of studies that have been conducted regarding distracted driving correlated to mobile phone use:

1. Manual interfaces are significantly superior to voice interfaces for task duration for a wide range of functions across a large number of different studies and tests including naturalistic, simulator and even data from GM’s OnStar division. But voice interfaces outperform manual interfaces when correlated to lane keeping, speed maintenance, car following, eye glances, object and event detection and “subjective assessments.”
2. Talking/listening in hands-free or handheld modes on a mobile phone are both significantly, statistically safer relative to a wide range of other distracting activities, including consuming food or drink, based on a recently released Virginia Tech naturalistic study of 13,000 vehicles over a 90-day period using DriveCam video monitors.
3. A study of Sync use co-authored by Dr. Tijerina found Sync voice interfaces statistically superior to manual interfaces for everything but digit dialing and answering incoming calls. Voice had the advantage for eyes-off-road time, standard deviation of lane position, percent of trials with a lane exceedance, maximum speed difference and pedestrian detection task reaction time.

Source:  Ford Motor Company, Oct-10

Dr. Tijerina proceeded to carefully deconstruct the sources of misinterpretation and flawed methodologies that have been exploited by regulators and lobbyists involved in the distracted driving debate. In spite of his extraordinary presentation and lengthy responses to audience questions, there is no doubt the distracted driving discussion will continue unabated. It is also certain that car makers and their suppliers will make further advances toward safer user interfaces.

While people are using mobile phones for a wider range of functions than just making phone calls, such as remote vehicle access and microtransactions, it is not likely that anyone will ever replace their vehicle key fob entirely with a smartphone application. With that in mind, Delphi has introduced a Smart Key Fob that uses near-field communication (NFC) - for systems intended to be used in Europe or Asia where NFC is more widely implemented, Bluetooth and UHF technology to provide drivers with remote access to vehicle information while helping to ensure the security of the data exchange.

The “key” advantage of the Delphi solution is that it provides for application to vehicle data and vehicle control and status access without the need for a cellular subscription. For this reason, the company has positioned the Smart Key Fob as a low cost solution to vehicle connectivity. The Delphi-implemented NFC solution and Bluetooth connectivity offers, secure information transfer from the fob to the phone with a low power consumption mode and a low-range communication profile – only 2 inches (5 cm) for NFC – that helps prevent hacking. The company says the data exchange is made possible with modules integrated in the vehicle. The UHF system antenna enables data transfer from the vehicle to the key fob with a range of more than 650 feet, and the transferred information can be accessed by the driver via any NFC-compatible portable device that has an active display such as a smartphone. Data that can be accessed and managed includes mileage and fuel level, safety and security information (such as tire pressure, door or window open or closed status, etc.), maintenance warnings and alerts, personalization features (seat, steering wheel, A/C configuration), vehicle location (via GPS), driver identity, in-case-of-emergency (ICE) contacts and vehicle type. Of course, the onset of electric and hybrid vehicles only intensifies the potential interest in Delphi’s low-cost solution as drivers will need to remotely assess vehicle charge. The complete roster of accessible applications for the fob-to-smartphone system includes: Enhanced command/control of all vehicle functions Notification of vehicle security and diagnostic alerts Vehicle finder Pre-trip remote vehicle setup Diagnostics Eco-scores Driving history/patterns Linkage to OEM Web portals Automatic opt-in marketing data on vehicle usage and driver preferences Control of vehicle functions remotely with graphical confirmation (e.g. doors, windows, engine start, HVAC, seat, navigation, audio) Reconfiguration of vehicle preference settings easily and remotely Delphi says the marketing propositions for the system include branding opportunities through the phone app and connected Internet portal and the opportunity to establish opt-in marketing programs to automatically collect driver usage data. Delphi has shown the solution to some OEMs, but has yet to announce a platform win. Further Insight: http://bit.ly/cPilqP - Advanced Entry and Start System Supply and Fitment Database – Mak – Strategy Analytics http://bit.ly/prpYX - Vehicle Entry and Go: Passive Systems Set to Challenge RKE – Mak – Strategy Analytics

Autoliv has announced the return of night vision technology in the automotive industry with a forecast of as much as 200K/year by 2014. The company shared its plans at a recent meeting of the International Motor Press Association. While the outlook may seem modest, it reflects a $100M+ opportunity for the industry and the potential for significant life saving in the future. If these expectations are fulfilled, it will represent vindication for a technology first introduced with much fanfare by Cadillac and other makes, but which never caught on. The consumer appeal of night vision technology is significant. More than half of consumers recently surveyed by Strategy Analytics (http://tinyurl.com/y8jalzh) reported a willingness to pay for the technology, the highest proportion in the survey for any safety technology. Consumers also indicated a willingness to pay more for night vision than nearly any other safety system. Unfortunately, on average, consumers indicated they were only willing to pay $400-$500, well below the cost of current systems. In addition to broad consumer interest, industry data related to traffic fatalities suggests a powerful role for night vision to play in saving lives. Source:  Autoliv To make its case for night vision, Autoliv cites data from the University of Michigan Transportation Research Institute which breaks vehicle fatalities into four categories and assesses the percentage of fatalities within those categories that occurred at night. The report shows 30% of “other vehicle in motion” fatalities occurred at night, 70% of pedestrian, 50% of “overturn,” and 60% of “tree.” Time of day pedestrian fatality data from the National Highway Traffic Safety Administration shows most fatalities occurring during the hours of darkness or dusk. And data gathered around the world and reported by Autoliv shows substantial percentages of pedestrian fatalities occurring at night-time and away from intersections – which might provide better lighting. The greatest challenge for broad acceptance of night vision has been and remains cost. Consumers looking to add the technology to their vehicles are still paying upwards of $2,000 for the privilege. Pricing has not come down much, but the solution itself has changed considerably. Night Vision 2, as Autoliv refers to it, has benefited from enhanced imaging technology (ie. clearer pictures), the integration of other sensor inputs such as pedestrian detection, the wider deployment of larger in-vehicle displays, extended range, and improved sensitivity. Taken together, these improvements have made for a more acceptable and effective – though still expensive – solution. Autoliv’s solution is based on far infrared camera technology from Flir, not to be confused with near infrared technology supplied by Bosch on the 2010 Mercedes S Class. Autoliv’s Night Vision 2 is able to “see” 50% further down the road and the enhanced images can now be displayed in head-up, driver information, center stack or other navigation displays. Autoliv the increased sensitivity in the system allows it to detect pedestrians in a “static warning” or as they move into the vehicle path. Warnings to the driver are speed dependent, the company says. Night Vision 2 has been implemented on the 2010 BMW 5 and 7 Series, Rolls Royce Ghost and Audi A8. The next challenge for Autoliv is animal detection. The company cites a wealth of data from multiple sources pointing out the number of fatalities related to animal strikes, which are particularly suited to a night vision solution since they tend to occur at night and away from well lit intersections. Night Vision 2 has arrived, according to Autoliv. It is now up to OEMs to determine if this technology will find a permanent home in the automotive market on its second visit. Related Report: Consumers Interested in Advanced Safety Features, but not at Current Price - Schreiner - User Experience Practice Source:  Autoliv Technorati Tags: audi,autoliv,bmw,bosch,fatalities,infrared,mercedes,night-vision,pedestrians,rolls-royce,safety

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.

https://www.msndirect.com/MSNDirectServiceAnnouncement.aspx Microsoft has announced that as of January 1, 2012, its Road Traffic Information (RTI) service, MSN Direct, will be discontinued.   MSN Direct is an FM radio-based digital service which allows specially equipped portable devices to receive information from MSN Direct services in the US.  Devices that support MSN Direct include PNDs and embedded navigation units.  With these devices, subscribers gain access to road traffic information (RTI), as well as weather, gas prices, local events, stock quotes, new movie information and flight times. MSN Direct’s business model faced challenges from the start Two years ago when the PND market was in a strong growth phase and fuel prices were high, the MSN Direct product looked promising as it developed ties with US PND leader, Garmin, as well with aftermarket navigation system suppliers.   With a price point of $129.95 for MSN Direct for the duration of the device (and recently reduced to $99.95), a compelling case for RTI and fuel services could have been made to consumers.   When the price of the service is amortized over the product life (roughly 3 years) a consumer would only need to save about $0.83 a week in fuel to cover the price of the service. However, MSN Direct suffered greatly from being removed from point of sale of a navigation device.   As an add-on service, MSN Direct had little control over how aggressively its service was sold to buyer of PNDs and aftermarket navigation at Big Box stores or even how well buyers were informed of the service. Furthermore, most Americans tend to be quite comfortable receiving traffic updates from traditional media sources such as television and radio.  To many, the perception of RTI quality does not merit paying for what can be attained through traditional media.   To others, MSN Direct was simply not perceived as high-tech enough, as RTI technology has been evolving rapidly. In Jul-09, Strategy Analytics spoke to representatives from MSN Direct who remained optimistic about the future of MSN Direct, stating, that by winter of 2009, the price of MSN Direct receiver chips will be the same price as RDS-TMC chips, or about $1 and that a further reduction in subscription price points should drive subscription.   Strategy Analytics remained dubious about this possibility, especially as Navteq was grabbing for market share by offering free lifetime traffic updates on some Garmin devices and access to traffic information over mobile phones.   This coupled with greater distribution of traffic information via cellular to smartphones appeared to sound a death knell for MSN Direct and other paid RTI services that provide the very highest quality RTI. Not the end of Microsoft in RTI The demise of MSN Direct does not mean Microsoft has exited the market on RTI, but instead simply has taken a breather.   Microsoft Research laboratories have spent five years developing a complex software model called Clearflow.  Clearflow is designed to help one determine if it is truly faster to detour when one is confronted with a traffic jam.   According to U.S Microsoft, Clearflow will be integrated into Bing Mobile and other Microsoft mobile applications, including in-car navigation and personal navigation devices and Clearflow will be available at no cost.  In addition, Microsoft beat Google out of the blocks in announcing real-time search with non-exclusive deals with both Facebook and Twitter.   The demise of MSN Direct does not diminish the role of RTI, but rather reflects the evolution of the RTI, interlinked with navigation and location. Clear business models will win the day The implications of MSN Direct’s demise should signal to others such as Sirius XM Traffic that trying to establish a directly consumer funded TMC+ service in volume markets continues to be extremely difficult.  Ad-funded models are also in the early stages of evolution.  And while the lessons are less clear for TomTom and others offering truly premium traffic services, they should to take note of MSN Direct’s difficulties in overcoming RTI quality perception issues, establishing well targeted price points, and how to bundle, successfully, RTI with navigation. The future of 'standard' RTI services is when they become more fully integrated with turn by turn navigation and maps, and together, they start to be used to 'hook in' consumers for high end high quality RTI, and location based services and applications. Strategy Analytics has profiled a wide range of RTI vendors in the forthcoming report 'Road Traffic Information: Competitive Positioning and Business Models', publication due Nov-09 Strategy Analytics has addressed the changing nature of the Location Value Chain in a Oct-09 webinar at:   http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5087 Strategy Analytics will be hosting a panel discussion on Road Traffic Information at TheWhereBusiness.com’s Navigation and Location conference on December 1-2 in San Jose, CA at: http://www.thewherebusiness.com/navusa/

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’

http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5052

http://social.thewherebusiness.com/content/google-uses-own-database-google-maps-us Most consumers recognize Google Maps, yet few knew that Google Maps had rested on map data belonging to others, at first Navteq and then Tele Atlas. Navteq and Tele Atlas have dominated the lucrative business of supplying map data, a position that many believe will grow increasingly lucrative as location based business opportunities increase. While there have been rumblings that “crowd source” mapping would soon threaten Navteq and Tele Atlas, these maps would unlikely be sufficiently accurate for commercial use. With major barriers such as, heavy infrastructure costs for developing and maintaining maps, Navteq and Tele Atlas appeared comfortably in control of the maps data market for the near future. Leveraging its brand recognition and heavy user traffic, Google has announced that it will now use maps based upon TIGER (provided by US Census Bureau) maps, an undisclosed third-party, its extensive StreetView data, and crowd sourcing. While this only applies to the US, the implications are vast. Google has un-tethered itself from the weighty licensing fees and conditions that Navteq and Tele Atlas attach to their data, though Google’s freedom comes at the expense of map accuracy. Navteq and Tele Atlas have made a business of having high quality maps and these have been extremely important for automotive navigation. While Google has proven that it can work rapidly, in 2008 Street Views imagery saw a 22-fold increase, Google will still need some time to catch up in terms of quality. The degree of quality that Navteq and Tele Atlas offer are not required for all location based applications. Google could quickly provide first rate maps of major metropolitan areas, these areas will prove to be the most lucrative as location based opportunities emerge. While these maps might not be appropriate for automotive navigation, there is certainly opportunity with mobile device applications. Recently, Google’s CEO, Eric Schmidt has said, “We can make more money in mobile than desktop eventually because the mobile computer is more targeted. You carry your phone everywhere, it knows all about you, it knows what you’re up to. We can do a very, very targeted ad. Over time, we’ll make more money from mobile advertising”. Untying itself from Tele Atlas, Google can offer maps and an API for others to use these maps without being saddled with licensing restrictions which severely hampered efforts to deploy ad-supported applications. In the longer term, Google will certainly aim to rival Navteq and Tele Atlas, as controlling map data will put Google in a more secure position on the location based opportunity value chain. The relative comfort of a virtual duopoly has been shattered; Navteq and Tele Atlas will need to focus on providing better maps and faster updates at lower prices with fewer restrictions. Navteq (owned by Nokia) and Tele Atlas (owned by TomTom) boasted strong strategic relationships within the location based market, Google will certainly look for greater integration on Android phones. While this announcement is concerning to Navteq, it is painful to TomTom/Tele Atlas. Google is likely already positioning itself to use its own maps in numerous countries across Europe. The competitiveness of TomTom/Tele Atlas might well be strengthened by the development of more wireless operator relationships for navigation and location applications, but maybe this is too late. Strategy Analytics has also examined consumer brand perceptions of Google within the navigation market in the Oct-09 complimentary webinar at: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5065 Strategy Analytics has recently examined Google’s entrance into the automotive market: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5019