When visiting Shanghai a couple months ago I was struck by the fact that multiple auto dealers visited during my stay did not have cars available with activated telematics systems.  This meant that the dealer was not able to demonstrate the technology to customers virtually guaranteeing consumer apathy.

This past week I was visiting car dealers in Italy and discovered a new barrier to consumer adoption, cars without power in the showroom.  Now I am the first person to acknowledge that consumers put a greater emphasis on style, drive and price than they do on infotainment and telematics (see attached slide), but cars without power in showrooms seems absurd in an age when the electronic and software content in cars is on a steep rise relative to the value of the vehicle.

These incidents were shocking to me because I experienced the telematics disconnect in multiple dealers in China (FAW Toyota, Nissan, BMW) and the power failure in multiple dealers in Italy (Fiat, Volkswagen, Hyundai).  The Chinese experience was exceptional because in the past I have had successful telematics demonstrations at Buick, Cadillac, Toyota, Lexus and Roewe dealers.

At the time of my visit to Shanghai, the dealer said that there was only one BMW in all of Shanghai that had telematics service provisioned for the purpose of providing a customer demonstration, but that vehicle was located on the opposite side of town.  The Nissan and FAW Toyota dealers simply had not activated any of their cars.  The only similar experience from my past was with Roewe’s Inkanet-equipped 350 which was most often lacking power on the dealer floor because the Android-based infotainment system had drained the battery.  (Roewe eventually installed Inkanet demonstration kiosks with their own power.)

The experience in Italy was surprising for the manner in which it was discovered.  The hatchbacks of many of the cars – which close electronically – were all ajar, not completely shut.  The natural instinct when one sees a door that is not fully closed is to give it an added shove or open and close it again.

Attempts to close these hatchbacks brought either a panicked or slightly amused response from the dealer sales person who had to explain that the hatch was powered and, when left on, tended to drain the battery in the showroom rendering the feature useless and the hatch not “closable.”  Usually the dealer had taken the added measure of wrapping paper or cardboard around the latch to prevent damage from customers trying to slam the hatches shut.

Is this problem emerging because cars are sitting too long in showrooms unsold?  Are dealers trying to avoid paying steep electric bills?  Not likely.

What is more likely is that dealers simply consider the electronics in the car to be a low priority, a fact that is borne out by Strategy Analytics research (http://bit.ly/XLOWpJ - Vehicle Purchase Behavior and Priorities of Chinese Consumers).  They have either reached this conclusion on their own in reaction to customer behavior or they are responding to a lack of auto supplier focus on selling sophisticated infotainment systems.  The danger, of course, is that dealers are following the lead of the factory.  If OEMs are not making a priority of infotainment systems then low attach rates and low customer satisfaction scores will result - ie. a self-fulfiling prophecy.

It may also be that dealers don’t want to engage in resolving consumer confusion regarding smartphone connections, voice recognition, navigation systems and apps.  Years ago Fiat was touting Blue&Me with point-of-purchase materials throughout much of Europe, but Blue&Me signs are no longer present in Fiat dealerships in Italy.

The picture is even more complex for Fiat, given the presence of Garmin, TomTom, and Magneti Marelli/Wind River navigation system options on its cars.  But Volkswagen has a growing range of infotainment options, as well, none of which could be demonstrated at the dealer visited in Italy.

The one exception encountered during this brief dealer tour was Hyundai.  Hyundai had a large sign touting the special edition of its i20 with a Pioneer infotainment system (the Aha Radio) enabling connection to a customer’s iPhone to access content and applications.  The dealer opened the hood to engage the battery to enable the demo, which amounted to a self-demo of the system which paired quickly and streamed audio via the supplied cable.

The sad reality is that solutions exist for both the telematics system provisioning problem in China and the power failure in Italy.  But the message is clear.  Selling infotainment and telematics systems introduces a new challenge to the process of selling cars – calling attention to power requirements, user interfaces, smartphone connections and apps.

Car makers from Ford and GM to BMW and Hyundai have introduce special dealer training programs and even Apple-like genius bars to bring customers – and dealers – along on the technological journey.  Clearly more guidance and support are needed if the industry is to achieve success with connected cars.  But making sure cars in showrooms are powered and that embedded telematics systems are provisioned seems like pretty basic stuff at this stage.

Best Buy is kicking its Commercial Division automotive aftermarket efforts into overdrive in 2013 with plans to more than double the number of major metro areas covered from 12 to 27.  For the past two years Best Buy has been working with AddOnAuto to build an auto dealer-focused program of vehicle upgrades around a cloud-based platform capable of matching any car with a nearly comprehensive catalog of compatible accessory gear including everything from mud flaps to navigation systems.

The program is unique for a variety of reasons including the fact that it encompasses most aftermarket stereo brands and integrates the installer capabilities of Best Buy’s own 3,000-strong Geek Squad.  Most notable is that the program only includes products that cannot be shopped in retail stores or online, which is one reason for Sony not being included since the company lacks a two-tier program.

The program is operated by Best Buy’s Commercial Division and targets fleet, insurance and car dealer markets.  But the insurance program, for replacing stolen or damaged equipment, is not yet up and running and the dealer program is by-far the largest business segment. 

Kicked off in Boise, ID, more than two years ago, Best Buy’s mobile electronics program for dealers provides a subscription-based, Web portal where dealers and their customers can browse for compatible aftermarket products and even see what a sample vehicle will look like following installation.  The subscription is $450/month.  The portal replaces physical catalogs or more generic online ordering systems that lacked the car-level detail and visualization tools.

The program is currently operating in Los Angeles, Phoenix, Atlanta, Miami and Minneapolis among other markets.  AddOnAuto is separately recruiting dealers with a less robust offering, but the company claims in its promotional materials that 9 out of 10 consumers buy accessories for their new cars; six out of 10 spend as much as $1,500 per car; but that auto dealers capture only 10% of this business, even though 75% of consumers tell AddOnAuto that they’d prefer to buy from their dealer.

Best Buy will also provide sales training, marketing support and sales tools along with free concierge pick-up and delivery, according to company literature.  The group was recruiting dealer participation at the recent National Automobile Dealer Association convention in Orlando with a discounted subscription offer of $149/month.  Aftermarket mobile electronics suppliers contacted by Strategy Analytics confirmed the success and high expectations for the program thus far.  Best Buy representatives declined to share program revenue information.

“Gentlemen… We have the technology…” paraphrasing Richard Anderson in character as Oscar Goldman in the opening sequence of “The Six Million Dollar Man.”

In the U.S., three times as many people are killed in accidents that occur at intersections than are killed as a result of distracted driving. The technological remedies for this highway holocaust exist, but traffic authorities continue to be distracted by short-term fixes of dubious efficacy (red-light cameras) and daunting budget barriers.

This issue has particular resonance now that U.S. Dept. of Transportation Director Ray LaHood has announced his departure.  A new director will be resetting the agenda of the National Highway Traffic Safety Administration (NHTSA) and intersection accidents ought to be high on the priority list. 

The issue of intersection safety has implications for fuel efficient driving and the coordination of urban traffic grids.  Some of the key applications for NHTSA’s proposed vehicle-to-infrastructure communication (using dedicated short-range communications – DSRC – technology) are built around the timing of traffic lights to ensure the smooth movement of traffic, the reduction of congestion and emissions, and the prevention of accidents.

Two innovative solutions (and a Federal study), take quite different approaches to meeting these challenges and highlight the use of smartphones and existing wireless technology, while also raising questions about the ability to transition the current fragmented traffic light infrastructure in the U.S. and elsewhere to DSRC technology.  (A more detailed discussion of this issue is available to Strategy Analytics clients at: http://bit.ly/VWQEBx - Vehicle Safety at the Crossroads – Literally.) 

The two solutions come from Global Mobile Alert and Green Driver.  The Federal study is being conducted by the Federal Highway Administration (FHWA). 

Global Mobile Alert has patented (http://bit.ly/XfZCdQ) the use of either an on-board or off-board map accessed by a mobile phone to alert drivers who are using the phone to hazardous conditions ahead including intersections, railroad crossings and school zones.  Alerts and messages to the driver can be tailored to the nature of the hazard. 

Global Mobile Alert has further patented the use of wireless communication between the traffic light and a mobile device to determine the phase of the light in relation to the speed of the car in order to alert the driver, particularly in the event of the mobile phone being in use.  Global Mobile Alert executives envision a variety of scenarios and applications of this patent - but – the fundamental functionality revolves around cellular communication and location technology.

Green Driver, on the other hand, taps into an Internet feed from local municipalities to access signal light timing data which can be fed to smartphones for the purpose of enabling more fuel efficient driving by letting drivers avoid red lights.  But the Green Driver approach can also alert users to red-light runners, as long as those drivers have the app downloaded to an operating phone. 

Meanwhile, the Federal Highway Administration (FHWA) in the U.S. is in the midst of a two-year project to reduce traffic delays by enabling communication between vehicles and traffic lights.  (BMW is a sponsor of the research along with two universities.)  The FHWA estimates that “poor traffic signal timing accounts for 10 percent of all traffic delays – about 300M vehicle-hours – on major roadways alone.”

The FHWA’s objective is to use probe data associated with the deployment of vehicle-to-infrastructure communication to achieve a transformational change in how traffic is controlled.  To quote the study abstract: 

“This part of the study looks at the development of algorithm sequences for a connected vehicle to inform only relevant traffic signals about the vehicle’s proximity, velocity and signal request.  Information is sent from a traffic signal to a cloud-based data center, and then communicated over a 3G/4G network to in-car applications.

“With this data, the car is able to display signal phase and timing (SPAT) information to a driver and, if required, adapt the cruise control in real-time, according to the vehicle trajectory, to get through a signal corridor without stopping.  The technology, called ‘smart cruising’ also allows a driver to choose between reduced travel time or increased fuel efficiency.  Using ‘motor stops automatically’ technology, the vehicle can drive while the engine is switched off, effectively sailing along a corridor.” 

The FHWA’s use of the 3G/4G cellular network for its study reflects the fact that the only intersections equipped, today, with DSRC transponders are associated with a handful of pilots, such as the UMTRI V2I pilot in Michigan.  Global Mobile Alert takes the map-as-a-sensor approach to alerting drivers to intersections, but has also provided for RF communication between the car and infrastructure to support intersection alerts to drivers via the smartphone.

Green Driver’s work in connecting with the IP-based SPAT information of local municipalities (the company is currently operating in Eugene and Portland, Oregon; across the entire state of Utah; in the Dallas suburb of Garland; and in San Jose), has revealed a significant degree of fragmentation in traffic light systems and infrastructure around the U.S.  Some cities are online and able to “play ball” with Green Driver – sharing their SPAT info.  Other cities are able to share, but decline to do so.  Still other cities simply do not have the capability due to the limitations of the back-end systems or the physical roadside infrastructure. 

All three approaches – each targeted at different problems – are built around existing wireless technology.  Both Global Mobile Alert and Green Driver are essentially using the map as a sensor.  Green Driver obtains the SPAT data via the Internet while GMA proposes the use of cellular communication from the traffic light to obtain the timing info.

The new leadership at NHTSA has an opportunity to prioritize the reduction of intersection crashes and fatalities around a market-based approach based on existing technology.  Smartphones, map data, the cellular network and Internet connectivity ought to be leveraged to put into the dashboards of drivers the traffic light location and phase status necessary to improve the efficient management of traffic, reduce congestion and polluting emissions, and prevent fatal accidents. 

The Insurance Institute for Highway Safety (IIHS) continues to advocate for the efficacy of red light cameras to reduce red-light running and related accidents citing its latest research on installations in Virginia.  Not only do the IIHS findings conflict with more rigorous studies conducted by traffic authorities and universities everywhere from California and New Mexico to Virginia and New Jersey, it is by now clear that red-light cameras are nothing more than a revenue producing distraction and an invasion of privacy.

Red-light cameras do not even put additional officers on the street better able to focus on more important law enforcement matters.  In most deployments, officers must review and approve the citations – shifting the burden rather than conserving resources. 

We, indeed, have the technology to save lives, reduce congestion and emissions, and enable the safe, smooth flow of traffic through intersections.  And the best news of all, we can achieve all these objectives with market-oriented implementations of existing technology. 

“Most maps, including Google Maps, have not yet mapped the area.” – The Huffingtonpost (Sept. 2012) describing the Angelika Film Center in the Mosaic District of Merrifield, Va.

Can automakers, dealers, Tier One suppliers, and automotive app developers afford to continue requiring customers to pay ($199!) for annual map updates? My latest navigation adventure highlights the fact that the time has arrived both for “free” lifetime map updates in the car and more creative means for delivering monthly, weekly, DAILY! map updates for on-board navigation systems.

The map in the car has become the spinal cord for safety, powertrain, security, infotainment, and navigation systems.  Nearly every advanced system in the car requires access to location information – preferably on-board.

Increasingly, the on-board map is becoming a shared resource both for advanced driver assist systems and contextually aware infotainment systems.  For both of these cases context is determined, in part, by location along with weather, traffic and driver status among other things.

But there is an even more urgent issue, that I will return to, and that is the danger inherent in a driver following navigation instructions with an out of date map.  Few things are more distracting or disturbing than being told to make turns onto roads that don’t exist to enter freeways that have been bypassed.

All of these elements were brought home to me this past weekend.

My wife and I were trying to get to the relatively new Angelika Film Center in the Mosaic District of Merrifield, Va. last Sunday.  It was our first trip to this theater, so I was confident that neither the address nor the name of the Theater would be available in the on-board navigation system in my 2013 BMW 3 Series.  (This assumption would later prove to be accurate.)

To get to the theater I used Fullpower’s MotionX GPS navigation app on my iPhone 4.  MotionX is one of the most popular navigation apps on the iPhone.  Unfortunately, on this occasion, it insisted on directing my wife and I to a destination five miles away from the theater’s actual location.  (UPDATE: This was due to the fact that the Nokia map data was missing the information for my destination, according to Philippe Kahn, CEO of Fullpower.)

My wife then proceeded to look up the theater in the on-board POIs, with no success.  We then obtained the address online and attempted to enter it directly into the navigation system – ignoring the fact that the system in the car will not accept addresses that are not yet in the system.  So, in this case, we entered the street number closest to the actual address of the film center.

Half an hour after the movie’s start time we arrived at the cinema.  We accepted our fate and settled into a round of shopping and dinner and went to the next show – making for a later evening than originally planned.  (At least the toney establishment had toasted caramel popcorn!)

It was a minor event at the close of an otherwise uneventful weekend, but it highlights a huge problem that remains unsolved – on-board map updates.  (Yes, there are a few ways this unfortunate incident might have been avoided such as: a) using the Sendtocar function, which for some reason has not been working for my car; b) use the on-board Google Local Search to obtain the address – just checked and this would have indeed worked; c) ring up the BMW Assist Concierge service and have them download the address; or d) try a different mobile navigation app.)

Anyone who has been through a similar experience will appreciate the minor nightmare of not being able to find a simple destination.  You can imagine my wife and I pulling over into parking lots and side streets to double-check the entry and the results and to try a different approach.  I shudder to think about the amount of eyes-off-road time that was required before we found a solution and reached our destination.

But my minor nightmare is a terrifying reality.  Not only is the out-of-date map situation a nuisance, it is a driving hazard and a customer satisfaction failure.  It is no surprise, then, that JD Power identifies navigation systems as a source of ongoing and mounting complaints for car owners.

While JD Power is focused primarily on the user interface, it is time for the industry to confront the fact that every car being sold is going out the door with an obsolete map.  An obsolete map on board is an invitation to catastrophe for the car dealer, the manufacturer and the customer.  Yet no one seems especially worried or concerned.

The problem is most obvious in emerging markets where new cities and roads are proliferating on an almost-daily basis highlighting the limitations of digitized map in the car.  It is no wonder that Strategy Analytics’ research with navigation users in China has found the typical driver using multiple navigation systems - phone, on-board and portable navigation device – to get from point A to point B.

The good news is that the leading map makers – TomTom and Nokia – have progressed their map-building processes to enable daily if not real-time map updates on a global scale.  Nokia has even taken steps to put more of its surveying vehicles on the road while also providing for crowdsourcing of map data, something TomTom initiated many years earlier.  The problem lies in delivering those updates to the on-board system.

Most consumers these days will use their mobile phones to navigate if a destination is in a new or unusual location.  I will not delve into the shortcomings of mobile phone navigation in a car, but suffice it to say it is popular based on the findings of multiple Strategy Analytics surveys.

Car makers Ford, GM and Toyota Motor Europe have tried with varying success to enable display in the car of smartphone-based navigation instructions.  Ford was first with this approach and has had the most success.

But smartphone-based navigation defeats the integration of the map – the application spinal cord of the car – into advanced safety, powertrain and infotainment systems.  While smartphones can, indeed, deliver a contextual experience to the driver, the on-board map is necessary to properly anticipate workload demands on the driver based on the integration of on-board sensors with map-based and other inputs.

So, smartphone integration, while attractive and a useful car-selling proposition falls short of a fully integrated experience.  But that doesn’t mean the smartphone can’t provide another means to solving this dilemma.

At the recent North American International Auto Show in Detroit, Johnson Controls showed a solution from NNG using the smartphone as a map updating tool.  While the details were not clear – including whether the entire map or just portions of the map will be updated or, indeed, what the cost will be – the concept is spectacular.

Any driver getting into a car ought to be able to update the on-board maps on demand as needed.  Given current connectivity options, the smartphone is the smartest and best solution to this problem.

The fact that Johnson Controls is the first to show this approach publicly reflects the power of a newcomer entering the market.  While NNG works closely with other Tier Ones, such as Harman, it is Johnson Controls that put the concept front and center in its booth in Detroit, although no press release was published.

Based on conversations with competing navigation software providers, the likelihood is that competing systems and solutions will soon be on display.  The bottom line is that, once again, the smartphone represents the solution to a hazardous driving condition, not the source.  At stake is the mitigation of driver distraction, enhancing the driving experience and assuring the highest level of customer satisfaction.

2012 will be remembered as the year of usage-based insurance. But in retrospect it is a lot of sound and fury signifying nothing. Is usage-based insurance the silver bullet to simultaneously reduce traffic congestion, carbon emissions and highway fatalities?

The ultimate objective of UBI programs is to modify driving behavior or reward existing good driving behavior. (Yes, I know, insurance companies are looking to reduce churn by rewarding their best customers and stealing their competitors' best customers, but let's look at it from the consumer's perspective.) Some progress was made in 2012, but there is ample room for improvement in the area of on-board/embedded systems, OBDII plug-ins, aftermarket systems and smartphone apps.

So where do we stand at the outset of 2013? 

First, it is important to understand the key objectives of driver behavior modification: 

1.  Increased safety
2. Reduced emissions
3. Increased fuel efficiency
4. Lower insurance premiums

I start the year off in a new 2013 BMW 3 Series with a remarkably distracting BMW Apps iPhone integration (not reviewed here).  In trading up from my 2011 BMW 3 Series I have pleased my wife by moving to remote keyless entry, but disappointed her with a car that has no seat warmers – unlike its predecessor.  Like its predecessor, it also lacks a backup camera or sensors.  (Clearly out of step with the impending U.S. mandate.)

Still, the new car does come with a turbo-charged four cylinder engine and start-stop technology significantly reducing fuel consumption while increasing horse power.  There are multiple sources of feedback around green driving in the car and there is a toggle near the shifter to select driving style – Sport or ECO PRO.

With ECO PRO, the driver can extend the range of the vehicle by adjusting driving style according to cues in the instrument cluster.  It is no surprise that a German car company offers such a function since an hour-long drive on the Autobahn can produce dramatically different fuel consumption – and, hence, range – results based on speed.

A system for discouraging speeding in a BMW is a stroke of genius, particularly for me, given the fact that my record of violations spiked following the acquisition of my first BMW.  (There is no app – not even Coyote or Trapster – that would have saved me.)

The ECO PRO driving mode introduces a series of instrument cluster symbols and signals making very subtle (it IS a BMW after all) suggestions primarily based on reducing acceleration.  ECO PRO also ties into the operation of climate control systems for maximum fuel savings.  The system is even able to calculate and display for the driver the estimated percentage of fuel savings based on the settings selected.  The driver can also control the timing and nature of the driving tips offered by the car.

This system can provide a history of fuel consumption including energy recovery.  And, yes, it can also control the rate of cabin heating or cooling and the output of the seat heater – if there were one.  Similar systems are available from other car makers, but I am most familiar with the BMW offering and it is emblematic of an industry trend.

In contrast to this system of buttons, settings, alerts, icons and statistical analysis, my wife’s Toyota Sienna is equipped with an aftermarket Pioneer Aha Radio which periodically provides an “ECO Graph” of her driving performance.  I personally think my wife is something of a lead foot, but she thinks she is performing pretty well in this report.

Unfortunately, the report appears at random intervals and fails to explain what, if anything, my wife is doing well or how she can improve.  For her, the driving feedback is simultaneously interesting, intriguing and frustrating.  She thinks there should be rewards – anything from gold stars to insurance discounts – associated with her good driving.

There is no doubt that she is correct.  Her driving experiences in 2012 included a brief stint testing Progressive Insurance’s SnapShot usage-based insurance OBDII plug in.  The device annoyed her with loud beeping during hard braking, but wirelessly delivered a graphical presentation of her driving behavior to a Website. (There are a wide range of third-party offerings with Website dashboards charting driving behavior and providing driving tips.)

Progressive offers SnapShot in Virginia, where my wife and I live, but after mailing the device back to the company, the insurer never responded with an evaluation or offer of coverage.  SnapShot claims customers can save up to 30% in the program. 

Whether that is actually true or not depends on how much you trust an insurance company.  Progressive more or less discourages drivers the company determines will not benefit from the program.

My wife briefly tested another OBDII plug-in from a company called GridLoyalty.  Founded by a former Intelligent Mechatronics executive, GridLoyalty promised a range of affinity offers based on driving behavior.  Unfortunately, most of the affinity offers were associated with organizations – such as convenience stores – in the Las Vegas area.  While the device provided wireless feedback to a Website – a la Progressive – there were no offers in Virginia.

In the year past, insurance companies and their third-party partners, crowed about the wonders of usage-based insurance.  Even government regulators embraced usage-based insurance as a tool for reducing driving and, therefore, congestion and emissions.  Studies show that drivers in UBI programs tend to drive less in general and after joining the programs.

In spite of the enthusiasm and publicity surrounding UBI programs and more than five years of market availability there are still fewer than 2.5M users of these systems around the world.  There is good reason for this lackluster consumer response.  The programs offer minimal savings and require a significant surrender of privacy.

The daily relevance of an insurance discount is less a benefit than a sword of Damocles swinging over the head of the driver in case that driver deviates from his or her previously safe pattern of driving.  What is missing are daily rewards and/or penalties.

MetroMile, an insurance startup, is introducing a pay-per-mile based offering that the company hopes to expand to other value propositions such as vehicle service and warranty offers.  The MetroMile offer is a step in the right direction, but falls short.  What is really missing is a more comprehensive affinity program tying vehicle use to offers and discounts for driving-relevant products and services such as fuel, parking, restaurants and tolls.

The MetroMile offer (Company Website: http://bit.ly/ZRHooE) is attractive for its simplicity relative to offerings from insurance companies.  But what is necessary is for local governments, tolling authorities, roadside franchise operators and such to coalesce around wireless payment systems to enable a more broad-based program of driver rewards and, yes, penalties – ie. drive less, save more.

Implications:

Car makers, such as BMW, are already delivering on in-vehicle systems designed to modify driving behavior.  The next step is actually rewarding that good behavior with more than just insurance discounts based on intrusive tracking systems. 

A free cup of coffee, tank of gas, parking space, hamburger or oil change ought to be enough to convince nearly any driver to be willing to share their location information and vehicle data.  Though distracting, BMW Apps does provide smartphone-based vehicle information feedback while also enabling some limited remote operation of the vehicle - illustrating the fact that there is a role for the smartphone in this new value proposition.

And what about traffic management authorities able to reward drivers - from specific neighborhoods and/or on short notice via smartphone apps or other alerts! - for NOT driving on days when high levels of congestion or pollution are anticipated?  Or maybe specific drivers are granted HOV lane access or other driving privileges on demand or for a particular time of day - or for a premium as in the Washington, DC area.  There are clear opportunities for public-private collaboration and/or direct consumer engagement.

Is there a future for usage-based insurance?  Yes, there will always be consumers who will do anything for a discount of any kind.  But usage-based insurance is likely to remain a niche application for the foreseeable future.  That niche role will be a disappointment to governments hoping for UBI programs to provide a market-based means for reducing emissions and traffic.

But if car makers are able to build more effective affinity programs, then UBI programs will benefit from the expansion of vehicle data sharing.  The question is which marketing partners and OEMs will lead the way in 2013 and what will these programs look like.  And, finally, is it possible to retrofit a 2013 3 Series with seat warmers?

A traffic tempest has erupted in a Washington, DC, teapot. The leading local broadcast traffic information provider, WTOP “with as many as 20 full- and part-time reporters,” in the words of one blogger, has “outed” local broadcast competitor, NPR affiliate WAMU, for using a remote traffic reporter – Jerry Edwards, previously seen regularly on NBC’s Channel 4 until his retirement in June 2011. Edwards is reporting DC traffic for WAMU from his home in Sarasota, Fla., where he moved after selling his home in Maryland, according to a Washington Post report.

The Washington Post reported the not unusual traffic reporting scenario on Sunday, November 4^th (http://wapo.st/PRFfoy), which was followed by a blog on the topic (http://bit.ly/R9km4Y). At issue is whether a traffic reporting organization needs a physical presence in the market where it is reporting traffic.

With millions of advertising dollars at stake, the question is not a trivial one and it touches every organization from the local news-radio station to the state Department of Transportation, to traffic content providers and, yes, Google. Timely and accurate traffic reporting is vital to the management and movement of traffic around metropolitan areas and the guidance provided via navigation applications.

Location, location, location

The idea boils down to whether traffic can be adequately reported and interpreted from a distance or requires on the ground information gathering – that is, on top of in-place cameras and sensors and public reporting of incidents. WAMU has clearly voted in favor of remote traffic reporting. WTOP is insisting on the merits of local traffic reporting.

WAMU has a lot of company in the remote report category. Nokia Location & Commerce spun off its media assets more than a year ago in the form of Radiate Media. Radiate Media enables remote traffic reporting by providing access to real-time traffic and probe data with inputs from various DOTs, and incident and event data from “fully staffed operations centers” with 24/7 technical support, according to the company’s Website.

Actually, Radiate Media’s arrival coincided with the closing of many of the original Traffic.com local traffic reporting offices, such that most of Radiate’s activities are coordinated between Chicago and its Salt Lake City headquarters. Traffic.com was the traffic reporting company acquired by Navteq years prior to its acquisition by Nokia.

The remote traffic reporting philosophy is also supported by companies such as Google (handset GPS probes), Airsage (network signaling), and Trafficland (DOT cameras). Each of these companies views its technique-dependent solution as either the ideal approach to traffic reporting or as good enough. While some of these organizations provide predictive traffic modeling based on their single-sourced data, they all emphasize real-time traffic information.

This analyst has trumpeted the value of hyper-local insights regarding all aspects of location information. Traffic is no exception. But it is difficult though not impossible to offer hyper local traffic insights from more than 900 miles away, as WAMU is trying to do. It all depends on the input sources.

Better is the enemy of good enough

But the traffic data market is a classic case of better being the enemy of good enough. The only problem is convincing consumers that there is a better solution when they are content to get by with good enough. Worse, good enough solutions have sown despair among some traffic information users seeking truly helpful information. These are the people who regard traffic and weather as equally unpredictable – recent well-anticipated East Coast events notwithstanding.

WTOP has taken up the gauntlet of delivering better traffic information. The station approaches traffic as “a major news-gathering undertaking,” in the words of the blogger.

But WTOP’s commitment to authenticity and local reporting faces a steep challenge as a value proposition when information regarding traffic incidents and road conditions are freely and publicly available to all on the radio and via smartphone apps.  The station emphasizes its 24/7 commitment in personnel and information integration aided by listeners who call in to describe what they are seeing on the roads.

If you care about traffic in DC, you listen to WTOP

The WTOP effort is surprisingly analog, with individuals reporting traffic events live as they unfold, in a world dominated by digital inputs.  If you care about traffic in the DC area, you listen to WTOP.

WTOP executives further note that “there are no traffic cameras on federally controlled highways” and “a good percentage” of traffic cameras in the area are out of service at any given time. It is worth noting that Clear Channel’s Total Traffic Network, which maintains a regional office in Silver Spring, Md., maintains its own traffic camera network.

In fact, it is curious that the WTOP-WAMU contretemps almost completely omitted mention of Clear Channel. Clear Channel Communication’s Total Traffic Network maintains the largest private traffic monitoring network in the U.S., with 16 regional traffic hubs operating 24/7 and 10 smaller satellite offices.  TTN also maintains a proprietary network of traffic cameras as well as some aircraft all feeding the company’s TrafficNet internal traffic data platform which in turn feeds services including SigAlert as well as embedded navigation systems.

The challenge for all lies in the fact that with improvements in technology come parallel improvements in both local and remote traffic reporting. Different types of traffic information offer different value propositions for different users.

Casual observers of traffic information online, on the radio or on TV, may be satisfied with a general overview of conditions, while people driving in cars or navigating to a specific destination will not only want more timely and accurate information they will also need predictive traffic information, whether they are conscious of that need or not.

The increasing importance of traffic information, in a world of increasingly clogged highways, has stimulated interest in traffic information. What is unfolding today is a process of traffic information user education.

For some, remote traffic reporting will be okay. The WAMU solution is not unlike the Inrix-developed traffic app within the Aha Radio service from Harman. The app converts traffic flow information into speech output integrated with relevant local event notifications. It is a good enough solution.

The debate between WAMU and WTOP has implications for satellite radio broadcaster SiriusXM. Long considered a provider of good enough subscription-based traffic information, SiriusXM is in the midst of an extended process of determining a new way forward with a better traffic solution to preserve and expand its lucrative subscriber base.  When consumers are paying for traffic data as in the case of SiriusXM good enough can suddenly become not good enough.

Traffic data evolution continues

New and improved (Bluetooth) sensor data is on the way into the market from multiple suppliers fulfilling individual municipal and DOT contracts. Also on the way are traffic cameras enhanced with object and license plate recognition technology. With more embedded telematics systems will come improvements in vehicle probe inputs as well as systems and apps, such as Waze, that enable user-generated inputs and observations.

Traffic information suppliers are also moving steadily toward digital radio and IP-based TPEG traffic information that vastly increases the amount of traffic information that can be transmitted while enabling greater granularity in the identification of congestion location. And while some suggest, perhaps sarcastically, that drones would be helpful in interpreting traffic events and conditions it is no joke that drones could well replace helicopters – of which there are precious few today, replaced by cameras – to monitor choke points.

Implications

As George Harrison once sang: “It’s all up to what you value.” If traffic information is not mission critical to you or your organization you will not care about Jerry Edwards delivering the traffic news remotely. The important thing to know about traffic is that the nature and value of traffic information is changing every day.

There is an increasingly diverse array of traffic information sources and a steady shift toward higher frequency, higher bandwidth, higher resolution sources of traffic information obtained over fatter, faster pipes. The information is being interpreted on increasingly powerful computers with increasingly sophisticated algorithms capable of integrating an ever-expanding array of data types.

The last mile of traffic data delivery can be anything from an app to a radio or TV broadcast or Internet feed. Or the traffic information could simply be operating in the background of an off-board navigation solution fine tuning optimal routes for avoiding traffic.

Digital traffic resources are increasingly challenging analog human traffic reporters. Will digital “eyes” ever completely replace the human eye? Maybe. But until that happens, WTOP remains one of the best traffic information service providers in the country and WAMU’s traffic information is probably good enough for most.

OnStar announces its next global launch today as Mexico in 2013, validating Strategy Analytics' analysis when OnStar announced Telefonica as its partner for global expansion earlier this year (http://bit.ly/ORVLii - OnStar Reveals Regional Priorities with Telefonica Selection). Details regarding cars, services, partners and pricing have not yet been announced, but the move will likely serve as a proving ground for faster future market introductions anticipated for larger more strategic markets including Brazil and Europe.

Mexico is GM's fifth largest global market with slightly more than 160,000 units sold in 2011.  Brazil represents approximately four times the volume in Mexico, but given the government's Contran 245 mandate (http://bit.ly/ORYR5S - Brazil: The Embrace of Wireless Technologies Transforms the Telematics Market) for vehicle tracking and immobilization - which has been delayed for the 10th time until January 2013 - it makes sense for GM to proceed with caution. (The rollout in Mexico also allows GM to give its new ATOMS telematics platform a dry run with a GSM network.)

The same is true for Europe, where the eCall mandate has frozen many telematics deployment plans while legal and privacy issues are resolved along with logistical issues related to equipping public service access points with required technology. (http://bit.ly/tunyIL - European eCall Mandate Aims Low, Falls Short) In the end, it is highly likely that OnStar, when it arrives on European shores, will do so as a private solution working in parallel with the public eCall - unfortunately.

General Motors, meanwhile, is on a roll, posting steady sales increases throughout the world, according to the latest sales press release reported by the GMAuthority newsletter (graphic below). No doubt OnStar wants to join and add to that momentum with its value-added vehicle connectivity platform.

The launch of the ATOMS telematics infrastructure platform earlier this year by GM/OnStar has set the stage for rapid global deployment and growth for the service. (http://bit.ly/IpSRmf - OnStar Looks to Unify Connectivity Strategy) Mexico will clearly represent the acid test, serving as a dry run for country rollouts to come as well as a proving ground for the switch to GSM technology.

Best Buy continues to report horrendous comparable store sales and negative financial results with no clear end in sight.  The only two bright spots are mobile phones and appliances.  Consumer electronics sales are in the tank and headed further south along with services and content revenue. 

At a time like this one would expect Best Buy to be experimenting wildly all across its hundreds of stores, desperate to solve the marketing and merchandising riddle that has riddled its results with parentheses, the corporate code for negative comparisons.  What is unfolding instead is an apparent stay the course mentality sure to doom the chain to the kind of accelerating decline that has already claimed Circuit City, CompUSA and a growing roster of other once-great retailers.

I wrote a blog more than a year ago (http://bit.ly/hN2p7D - Best Buy Rewiring OEM-Retail Relationships with Sync, Focus, OnStar Deals) speculating that Best Buy had a unique opportunity to leverage a budding outreach to Detroit with its mobile electronics and installation capabilities to make a bold statement around vehicle connectivity.  The chain maintains on-site installation facilities to support its mobile electronics business and mobile phones remain a bright spot in sales results.

Little has changed since I wrote that blog.  Best Buy has not spruced up the mobile electronics department and the mobile phone department remains in the front of the store.  Yet, while Best Buy’s merchandise presentation has changed little, the market has moved along and Best Buy faces new threats.

At the core of the new challenge facing Best Buy is the retailer’s insistence on resisting classic merchandising strategy.  With mobile phones and related wireless devices as the main draw, it’s time to shift this department to the rear of the store – where a grocery might stock eggs, milk and butter.

The mobile phone department is not more than 20-30 feet from the entrance to the typical Best Buy store.  By shoving the most popular department category in the store to the very front, the opportunity to pitch digital cameras, notebook computers and, dare I say it, mobile electronics, to mobile phone shoppers has been lost.

But the new threat lies in the fact that Apple Stores are beginning to get into the in-vehicle connectivity business.  Here is where Best Buy has been caught flat-footed.  While Best Buy has bumped up its assortment in the mobile electronics department – based on recent store visits – to nearly three dozen head units ranging in price from <$199 to nearly $1,000, the department is still undermanned.

But a greater sin than having this department undermanned is the fact that low-volume mobile electronics have been hidden in the back of the store where one would expect to find the high traffic milk and eggs.  Despite renewed investment in mobile electronics, the average customer faces a huge challenge simply finding the department.

This is a sorry state of affairs when aftermarket companies are rushing to market a wide range of mobile phone connectivity products that probably belong in mobile electronics and might stimulate otherwise lackluster sales.  Instead, companies with innovative aftermarket offerings are insisting on merchandising their products in the mobile phone department – especially since that department is planted squarely in front of the store entrance.

Best Buy has made no secret of the fact that it sees connectivity as the key to its future.  If that is so, it is probably time to ditch the huge portion of in-store space devoted to content – ie. shiny discs – and give that space over to mobile phones and other connectivity offerings.

Bring the mobile electronics out of the shadows in the rear of the store and properly merchandise in-vehicle connectivity alongside the mobile devices consumers want to connect in their cars – from distracted driving mitigation products and insurance telematics offerings (Get your Progressive module from Best Buy? Why not?) to rearseat entertainment integrations for tablet computers and in-vehicle Wi-Fi solutions.

How about aftermarket safety systems from MobileEye, stolen vehicle recovery systems from Guidepoint and LoJack, or backup cameras and social network enhanced radar detectors (where legal).  It is worth noting that even Escort now offers a radar detector in the Apple Store.

Implications

Best Buy has a new competitor in the mobile electronics business in the Apple Store.  As if the department didn’t have enough challenges with the decline of aftermarket rearseat entertainment systems and portable navigation devices and the evaporation of the satellite radio retail business, now Apple’s retail juggernaut has the car stereo business in its sights.

It’s not too late for Best Buy to strike back and defend its legitimate claim to mobile electronics market leadership.  But to do so, Best Buy needs to shove the mobile phone department into the center and perhaps toward the rear of the store.  This high volume department needs to perform its critical task of leading customers deeper into the store where a wider array of impulse purchases await.

Simultaneously, Best Buy needs to bring the mobile electronics department into direct proximity with the mobile phone department.  The synergies between these two departments are manifest and Best Buy needs to capitalize especially given the fact that – as a destiny retailer – Best Buy customers have to DRIVE to the store in the first place.

By merchandising mobile electronics in the rear of the store, Best Buy is leaving fabulous marketing opportunities and money on the table.  At the same time, the store is telling consumers that mobile electronics simply are not a major priority.  It’s not too late for Best Buy to put things right in its mobile department.  Who knows, it might save the company.

Yesterday evening, while driving home from meetings in the New York metropolitan area, I had an extraordinary traffic information experience which highlighted a company in the traffic business that doesn’t often get much credit.  I am writing this blog as a shout out Clear Channel Commnication’s Total Traffic Network and as a plea for a new service: Traffic on Demand.

To better understand my story one must understand the traffic landscape.  There are several variables to getting traffic information correct and there are several kinds of traffic information.  The two most important elements of traffic information are incident and flow data. 

There is a widespread belief that real-time traffic flow information from organizations such as Waze and Google is “good enough.”  This perception makes life difficult for supplers such as TomTom, Inrix and Nokia Location & Commerce that want to charge for their traffic data.  These three competitors do their best to deliver real-time flow and incident information along with predictive traffic models – to allow them to enhance navigation routing instructions.

The quality and accuracy of traffic flow data is steadily improving thanks to the addition of more and more vehicle-based data probes.  Flow data is also benefiting from advances in roadside sensor technology – for example, from the implementation of Bluetooth sensors from a wide range of companies including TrafficCast, Traffax, Siemens, Philips and several university research organizations.

But as competitive pressures have grown, traffic information providers have had to reduce their investments in traffic observation resources.  Traffic observers help to enhance the publicly available sources of information regarding traffic incidents, the causal element behind traffic jams.

Knowing why traffic is backed up can play a big role in predicting when traffic will improve or how much worse it might get.  Also, knowing why traffic is backed up takes the stress and anxiety out of being in traffic.  If a driver knows traffic is backed up for a presidential motorcade, a tire changer, or a police emergency it allows him or her to relax and appropriately adjust expectations regarding the potential for clearing up the traffic snarl.

Historically, traffic helicopters provided the best insights regarding causality for traffic events.  But traffic helicopters have almost completely disappeared, in most instances replaced by ubiquitous roadside cameras.

Second only to helicopters are fixed observation points and control rooms manned by operators monitoring fixed cameras.  While many organizations in the industry have either drastically reduced or completely eliminated these investments, Clear Channel Communication’s Total Traffic Network maintains the largest private traffic monitoring network in the U.S., with 16 regional traffic hubs operating 24/7 and 10 smaller satellite offices.  TTN also maintains a proprietary network of traffic cameras as well as some aircraft all feeding the company’s TrafficNet internal traffic data platform which in turn feeds services including SigAlert and Metro Traffic as well as embedded navigation systems.

My story is all about the “why” factor in traffic data and easing anxiety.  I was southbound on Route 95 north of Philadelphia Friday afternoon when I noticed police cars blocking entrance and exit ramps on both sides of the highway around Cottman Avenue.  Traffic was understandably backed up on the northbound side of the highway though not, thankfully, on my side, southbound.

Still, as the magnitude of the back-up on the other side the Jersey barrier became clearer and as that data appeared as black backup icons on my embedded navigation system, I began to get curious as to what might be the cause of the unfolding event.  I had just gotten off the phone with an executive from TrafficCast who had mentioned he was in the Philadelphia area, so I immediately rang him back up.  TrafficCast is pursuing the deployment of Bluetooth-based sensors throughout the U.S. under the BlueToad brand with a recent win in the Boston area.

Two or three failed calls later, I decided to call executives at TangoTraffic to see if they might have some insight into the situation I was witnessing which, by now, had revealed itself as a multiple-mile backup.  TangoTraffic is a traffic-only cable channel, not unlike the Weather Channel, but focused entirely on local traffic.

TangoTraffic, which includes on its team some former Traffic.com executives and uses a Nokia L&C traffic data feed, is based in Malverne, Pa., not far from Philadelphia, so I was sure they’d have some idea what was going on.  Unfortunately, there was no answer.  I then called two Inrix executives, but no answer there either, likely due to vacations.  Inrix is rapidly closing in on global traffic information market leadershiop and is actively leading the industry shift to IP-based traffic information platforms.

With no success trying to reach Inrix, I turned, finally, to my most reliable traffic info source and on the second try got a vice president from Total Traffic Network on the phone.  Literally within seconds this executive was able to tap his TrafficNet database to tell me that the backup was the result of the funeral procession for Officer Brian Lorenzo, an off-duty, though in uniform, motorcycle highway police officer who had been killed two days before by a wrong way driver on the very highway on which I was traveling.

As a final note, the TTN executive let me know that by now, about 10 minutes after passing the origin of the tie-up, the highway ramps had been re-opened and traffic should be moving freely soon.

Implications

Good enough traffic information is only good enough until it isn’t good enough.  Witnessing the massive backup for the funeral procession of Office Lorenzo reminded me that real-time traffic flow info is not good enough.  There are few things more humbling to a driver than being trapped in his or her personal metal cage in a traffic jam.

Conversely, there is nothing more empowering than having access to the digital resources to make sense of the surrounding traffic conditions to be able to plan and respond accordingly.  Incident data is the key to unlock that power and Total Traffic Network is the market leader in delivering timely, accurate traffic incident data.

Traffic solutions are improving, contrary to the popular impression that traffic data services are as good as they are ever going to get.  BMW’s new IP-based, TPEG-capable traffic delivery platform for the new 7 Series will deliver more information, faster and in more granular increments along the highway, enabling what can only be called high resolution traffic information.

Traffic information has improved and is improving.  Enhanced access to more accurate and timely incident information is just one form of improvement.  As IP delivery of traffic information transforms the market it will be interesting to see how the quality and quanitity of traffic information is impacted.

TTN's analog human assets may be its most powerful tools in an increasingly digital world.  But what my situation called for was analog access to this digital information.  What if, instead of talking to a TTN VP, I were able to access the TrafficNet database - or some other cloud resource - by voice to understand the traffic situation surrounding me.  The traffic application within Harman's Aha Radio - enabled as it is by Inrix - is a step in this direction, but there is no reason why traffic on demand or traffic as a service could not be enabled.

More progress will come from image recognition being brought to traffic cameras along with crowd sourcing and wider deployment of more accurate Bluetooth-based roadside sensors.  In the end, though, there is no substitute for the human factor – the ability to identify causal factors for traffic incidents, report those causes, and point out solutions for stressed out drivers…like me.  But traffic on demand is the new frontier and TTN can make it happen.

"Those who cannot remember the past are condemned to repeat it." - George Santayana

I am happy to report watching with great amusement the Siri television advertisements featuring John Malkovich.  (See here on Youtube: http://huff.to/MYi4X7)  Very droll and certainly tantalizing from a speech recognition standpoint seeming to reflect, as claimed by Siri's parent Apple, that the Siri recognition engine is capable of learning the inclinations and preferences of each individual user.  As an automotive analyst, however, I've had to give those ads a harder second look.

Siri arrives in the marketplace at a time when government regulators in the U.S. - and in some geographies outside the U.S. - are focusing on driver distraction.  Siri appears to have been rapidly seized upon by multiple car makers as the ultimate solution to the distraction mitigation challenge.  The suitability of Siri to this task is posited by its alter ego brand name: EyesFree.  The promise of using Siri in the car is to achieve an EyesFree means of accessing features and functions on the iPhone.  Of course it is not quite hands-free because Apple is promoting the application with a steering wheel mounted trigger. 

(It is worth noting that engineers at Waze divined a way to use the proximity sensor as a trigger mechanism, but that is a separate story.)

Nevertheless, a tidal wave of what can only be called Siri hysteria ensued.  Apple, it seemed, had solved the automated voice recognition challenge singlehandedly.  It is at this point that I feel a word of caution is advised.  It wasn't so long ago, maybe six or seven years, that Bluetooth was embraced as the definitive answer to hands-free phone interfaces.  To be sure, Bluetooth has proven helpful, but it is far from a panacea, even after all these years of development and refinement.

The challenge for both Bluetooth and voice recognition is the fact that the implementers of these technologies continue to ask them to do more.  Bluetooth has not yet completely conquered HFI and the industry is already moving on to A2DP and SPP profile implementation.  AVR systems have not yet mastered one-shot destination entry and now car makers are introducing dictation and email and text message composition.  And Siri is more or less offering voice-based access to most iPhone functionality.

As you watch and chuckle over John Malkovich chatting with his iPhone remember that he is conducting his conversation in an utterly empty and quiet salon while relaxing in an arm chair.  This is nowhere near the operating environment of a noisy automobile cabin.

And to which organization should a car maker turn to solve its AVR challenges?  The maker of mobile devices held in the hand or to an organization built entirely around solving voice recognition challenges in a wide range of environments with a particular emphasis on automotive systems? 

Cloud-enhanced recognizers such as Apple's Siri may learn my inclinations and preferences and Google's Now AVR app may access Google's Knowledge Graph with 500 million entities and 3.5 billion relational facts, but neither of these organizations can offer car makers their undivided attention.  Robust voice-based solutions are to be found within the existing automotive eco-system and will reflect the priorities of the OEMs around quality of service.

Implications

Bluetooth is a powerful technology but it has caused many complaints while solving problems and enabling new forms of content and service delivery.  AVR technology is viewed as one of the key interface modes that will contribute to resolving distracted driving, but it is far from perfect or perfected. 

But the organizations that have taken AVR the furthest and are likely to continue to lead in the automotive market are already invested in the automotive market and present.  These organizations include Vlingo, Nuance (Dragon Go!), AT&T (Watson) and Microsoft (Tellme).  Car makers should take greater care before embracing a technology that may or may not satisfy customers, may or may not solve regulatory challenges, may or may not enable new features and functions - but will definitely generate customer confusion and aggravation.

The latest JD Power Iniitial Quality Study highlighted the fact that AVR systems are the leading cause of customer complaints.  This is significant given the fact that the study was conducted in the U.S. among a fairly homogeneous population of English speakers.  What happens to AVR technology outside the U.S. where dialiects are more numerous and more challenging.  Will it really be worth marring an existing HMI environment in the car with a steering wheel add on to accommodate a single phone maker.  Maybe, but as we take that risk let's do so with eyes wide open and with the intention of avoiding a repitition of past HMI blunders.

Because Siri was not conceived specifically for automotive use and because Apple does not provide for any distraction mitigation measures, the Siri proposition is an application free for all.  Siri enables all functions - maybe - instead of delivering a few very specific functions reliably and safely.  That, in the end, is the big difference between Siri and existing (or in development) automotive grade AVR systems.  Proceed with caution.