At Huawei's analyst summit in Shenzhen China, the Huawei team renewed its commitment to the connected car market. Following the announcement of its 3G and LTE communication modules - MU609T and ME909T - at MWC in Barcelona in February 2013, Mr Yang Yong - Vice President of Huawei's Mobile Broadband Products presented the company's strategy for the roll out of embedded automotive telematics solutions. Huawei will continue to invest in telematics - specializing in modules to partner with Tier 1 suppliers.

"Automotive Telematics and Smart Metering are the key M2M focus areas for us in 2013" said Mr Yang. "While we accept that we are the newcomers to this market, we will soon be announcing cooperation with a top Tier 1 supplier", continued Yang.

Strategy Analytics' latest research into the connected car opportunity is forecasting strong growth in most global regions, with shipment of OEM embedded telematics exceeding 40 million vehicles globally by 2020. "This represents a strong market opportunity for suppliers of hardware, services and applications, particularly as vehicle OEM's look to leverage the customer and vehicle relationship management (CRM/VRM) benefits of connecting the car", said Richard Robinson - Director of Automotive research at Strategy analytics.

Huawei's Analyst summit is an annual event that was held in Shenzhen China from the 23^rd to the 25^th of April 2013.

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

The unspoken theme to the 2010 Consumer Telematics Show held one day prior to CES in Las Vegas was HMI’s role in the safe interaction between the driver of the vehicle and the various portable and embedded electronics prevalent in today’s vehicles.  When polled, the vast majority of the 250+ attendees of the telematics conference indicated that driver distraction is a major concern. There is widespread legislation across international markets governing the safe operation of cellular phones while driving. Safety concerns and legislation over the next 2-3 years is also expected to cover music players/iPods, PND and smartphone use in the vehicle. There is also strong legislator interest and research into driver distraction issues surrounding driver use of multiple multimedia and automotive features within the vehicle.

• Ray LaHood, United States Secretary of Transportation has called distracted driving a “deadly epidemic” and NHTSA has stated that in 2008, 6,000 deaths and 500,000+ injuries were caused by distracted driving.

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/27/AR2009112702320.html Despite increasing demand for HMI innovation there are significant cost related challenges that will impact availability, pricing and competitive positioning between HMI products and between car makers. Achieving scale economies across vehicle segments and leveraging from markets and products outside the vehicle will impact automotive product development. Car makers have differing strategies towards `open' versus proprietary solutions for multimedia and communications solutions including HMI. For example, Ford and Fiat are working with Microsoft, whereas Toyota is considering taking a proprietary route to operating system (OS) platform development.

• The most notable progress towards `open' standards, platforms and APIs - and hence cost reduction - has been made by voice technology based automotive products.

As consumers multimedia usability experience improves rapidly on portable devices and in the home, there are increasing opportunities for automotive players to learn and leverage this progress for improvements in the multimedia and communications experience in the vehicle.

• There is a significant and growing gap between multimedia experience on devices and in the home versus automotive products.
• There is rapid growth in consumer adoption, functionality and user experience for: iPods; iPhones and smartphones; PNDs; and multifeatured devices.
• Display designs and location, voice technology, resistive touch, capacitive touch, other haptic technologies, other HMI technologies, improved intuitive menu structures, and user interface design all offer opportunities for automotive product improvement and competitive differentiation.  (Please refer to Strategy Analytics Blogs concerning the KIA UVO and Ford SYNC announcements at CES 2010)

Strategy Analytics forecasts strong growth for automotive voice technology and touch screen displays are set to reach $1.2 billion and $1.7 billion respectively in 2015. Strategy Analytics expects total revenues generated from voice recognition systems to increase from $284M in 2007 to $1,195M in 2015 representing a CAGR of 20% p.a. over the forecast period. Strategy Analytics expects total revenues from touch screen displays to increase from $660M in 2007 to $1,7102M in 2015 representing a CAGR of 13% p.a. over the forecast period (Exhibit 1.3).

• "Total" is the summation of demand from the major vehicle producing regions of NAFTA, Japan, Europe (West and East), Russia, South Korea, China and India.

For more information on vehicle HMI, please see the following Strategy Analytics report “Automotive HMI: Voice Technology and Touch Screens Have Significant Lead”:  http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4730

http://www.fastcompany.com/blog/chris-dannen/techwatch/ford-will-open-sdk-car-apps

Ford has announced that it plans to open its SYNC platform to third party app developers. Though no timeline is given for implementation, Ford has indicated that it will announce future SYNC features during the CES show in January 2010.

Though the SYNC system can be upgraded with new features or apps, only features developed by Ford are available for downloading on the syncmyride website.

Prasad Venkatesh, Vehicle Design & Infotainment at Ford is quoted in the article: "The way we're developing the toolkit, you could sit in the comfort of your home and plan a roadtrip," he says. Using a smartphone or computer, you'd then add points of interest or other plans. "At the click of a button, the cloud would make all that available to you in the car, and it would broadcast it to your social networking groups."

The quandary OEMs face is their inability to control the downloadable application marketplace. However, there is an opportunity for OEMs to leverage that the app space by testing and approving applications before release and in the case of Ford, working with partners to develop specific applications specifically for their vehicles.

An in-depth look at downloadable telematics apps can be found in the following Strategy Analytics report: Telematics as a Downloadable App. Arrives

http://www.strategyanalytics.com/default.aspx?mod=ReportFormatsViewer&a0=4973

Smartphone apps are popular downloads but are not necessarily a source of revenue. This has implications for automotive telematics app opportunities.

Prasad stated that “Ford doesn't know whether they will pursue an app store model ala Apple, and no firm plans have been made about monetization. The potential is there, however; he says he is encouraging the students at UM to pursue their apps with an entrepreneurial mindset.”

It is important for app store owners to provide the right balance between free content as an enticement for consumers to buy from the stores, and paid-for content to realize revenue.

A simplified app purchasing process, such as that perfected by the Apple App Store, is critical to the launch and overall success of an app store. According to Strategy Analytics’ Wireless Media Labs smartphone survey research, over two-thirds of iPhone and over half of BlackBerry respondents in the US have installed all or the majority of the applications on their phone for free.

Internet radio is a web based delivery of audio entertainment that is offered in two basic forms. In the first form, terrestrial and satellite radio stations stream live content or pre-recorded podcasts via the Internet. The second form is comprised by dedicated internet radio stations such as Pandora, Slacker and Last.FM which offer individualized, custom content based on listener input. The automotive digital radio market is ripe for applications that enable internet radio listening in the vehicle – though technical and business model hurdles remain. Safe vehicle-device interface solutions present product opportunities for automotive OEMs, not just for radio but also device based music file management. An automotive interfaced app for radio content does present opportunities, but there needs to be careful examination and identification of exactly how consumers use radio content, and how consumer radio listening habits are developing in the iPod/iPhone/Smartphone market across various market leading devices. Only then can an effective in-vehicle radio app be designed. Internet radio is one application within the in-vehicle infotainment mix that will have the app price plan managed by the consumers’ smartphone or internet enabled device and the accompanying dataplan - and not with the OEM car maker. The car maker could charge for the optional vehicle-device connection feature and avoid a subscription based pricing model. · Cellular data plan pricing will need to reflect the consumer’s willingness to pay – internet radio via cellular is not free. · It is important for app store owners to provide the right balance between free content as an enticement for consumers to buy from the stores, and paid-for content to realize revenue. A simplified app purchasing process, such as that perfected by the Apple App Store, is critical to the launch and overall success of an app store. Internet radio adoption in mainstream automotive markets is very unlikely before 2012. Though internet radio can be listened to in the car using a smartphone and Bluetooth A2DP vehicle-device connectivity, no purpose built OEM automotive internet radio solution with an integrated HMI exists. · May 2009 - Pandora announced that it is working with Ford to implement its internet radio technology with the Sync platform. · June 2009 – Pandora announced that it is working with automotive operating system and middleware supplier, QNX, to bring its internet radio solution to the automotive market. · Cellular network bandwidth limits are strained by streaming content such as internet radio. 4G solutions such as LTE and WiMax do not have adequate network coverage to be a viable solution for the automotive market. This blog summarizes the recent Strategy Analytics insight “Automotive Internet Radio far From Prime Time” that can be found at the following link: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5086