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

Nokia, BMW and Daimler highlighted mobile phone integration in their Geneva Motor Show announcements this month. But each company took a different path with its own merits and shortcomings. The most flexible solution was shown by Daimler, but the BMW and Nokia solutions will influence future integration decisions.

 

The solutions – two iPhone-based and one Nokia specific - reflect the three fundamental paths to integration. Nokia’s terminal mode emphasizes leveraging the vehicle human machine interface via a bi-directional data exchange that transfers the device display into the vehicle head unit; hands control of the device over to the vehicle HMI; and makes use of vehicle CAN data for contextual feedback to the driver.

 

The BMW Mini iPhone integration puts iPhone applications, most notably Internet radio from RadioTimes, behind a large-screen embedded interface. Availability of this new connected solution is unclear, although the implication is that additional functions will ultimately be enabled and the vehicle HMI – in particular, a multidirectional, finger-sized toggle – will allow the driver to interact with phone-based applications without touching the phone.

 

The Daimler solution, offered for its Smart cars, is the closest to market – due this summer with a $400 price tag – and represents the most elaborate offering. It is also a third path to integration, providing a dash mounted iPhone holder with a suite of automotive applications – the first such suite developed by an OEM. Daimler has even gone so far as to customize the on-device interface with larger fonts and buttons.

 

Among the big differences between the Daimler integration solution and the competing offerings is that the driver mainly makes use of the on-device interface. Included in the application suite in the Smart iPhone application are hands-free calling, access to the on-device music library and Internet radio, Bing Internet search, a car finder function, and navigation with a “smart touch” feature. The cradle acts as a control unit, charger and microphone with stereo integration for muting during calls.

 

An additional enhancement due later in the year is a Smart drive kit camera, for fitting on the windscreen. The device will be able to transmit pictures of the area in front of the car to the smart drive kit via Wi-Fi and will thereby provide traffic sign recognition functionality including speed limits – a feature offered on a handful of portable navigation devices.

 

The smart drive app for the iPhone can be downloaded from the App Store at a one-off price of €9.99 for the basic version. The navigation upgrade with up-to-date maps costs €49.99 per year. Daimler says its researchers are currently putting the final touches to the smart drive kit camera functions.

 

The Daimler solution for its Smart car line-up is particularly appropriate since Smart cars in Europe are quite often sold without a head unit. In this case, the customer’s iPhone indeed becomes the vehicle’s on-board car radio, hands-free phone, navigation and driver assist system.

 

In contrast, the BMW Mini offering requires an embedded solution which will limit its scalability and upgradability, although the display real estate is substantial and the use of the vehicle’s HMI elements is preferable. The Daimler unit requires the driver to use the iPhone screen as the main interface. All three of these solutions will benefit from voice interfaces.

 

Like the BMW solution, Nokia’s Terminal Mode is intended to hand off HMI responsibility for smartphone functionality to the car. While the solution is promising, and Nokia is working with partners including Alpine, Magneti Marelli and Harman Becker, it is proprietary. As a proprietary solution, Nokia will face challenges to achieve market adoption despite working closely with the Consumer Electronics for Automotive (CE4A) coalition of German car makers.

 

Concept vehicles using the Nokia technology were shown at Geneva by Fiat and Valmet Automotive. In fact, the solution shown by Fiat, mounting a Nokia phone on a dash board as a navigation device connected to the Blue&Me system was significant given Fiat’s existing relationship with TomTom for a Blue&Me integrated PND.

 

Nokia’s terminal mode is promising, especially given its anticipated ability to obtain CANbus data for integration with different applications, but as a proprietary solution it is likely to be geographically challenged (ie. Eurocentric). A good example of an equally elegant solution with limited distribution is Novero’s proprietary Bluetooth interface developed for Ford. This solution is at risk of being marginalized once Ford finally decides to bring Sync to Europe.

 

Nokia has the right idea in pushing hard at smartphone integration, but the company would do well to enable standards-based technologies already deployed rather than seeking proprietary solutions. Even in the best of scenarios, the deployment of a proprietary Bluetooth profile on handsets and in cars is a years-long proposition. Daimler’s solution arrives in a matter of months with upgrades and enhancements to come before the end of the year, no doubt. Mini won’t be far behind.

Intermap Technologies continues its steady advance on the automotive market, though many of its latest successful initiatives are focused in the consumer electronics market. The big payoff for Intermap will likely derive from the gathering enthusiasm for electric vehicles - and related green navigation and routing applications - and the emerging opportunity within advanced safety systems. In the meantime, the emergence of advanced safety and EV-related applications are creating an industry debate over whether vehicles will have one or more maps on board. The latest win for Intermap is an agreement to furnish Garmin with 3D elevation data for the United States and Western Europe for consumer electronic devices set to arrive in the market in the first half of 2010. The objective of the integration of Intermap's NEXTmap elevation data is to allow Garmin to create elevation sensitive content and applications across the company's product line. Intermap struck a similar deal with Tele Atlas to allow the company to integrate Intermap's 3D elevation data for its range of navigation products and services. Tele Atlas says the Intermap data provides a geospatial base layer enabling TA to conflate other visual assets such as building models, roads and landmarks to create a realistic visualization  product. Targeted launch into equipped automobiles is set for late 2010, the company says. Intermap's initial steps in advanced safety systems are focused on predictive lighting and partners include Visteon and Hella KGaA Hueck & Co. Intermap's concept is to combine its 3D elevation data, derived from its airplane overflight capture methodology, with map data for lighting systems that will conform to the twists, turns and changes in elevation of different roadways. The strategy puts Intermap in direct conflict with Navteq which has its own elevation data and is working with STMicroelectronics and Magneti Marelli to offer a similar solution. Intermap points out that its approach provides comprehensive coverage of road elevation data including secondary and tertiary roads, which Navteq's vehicle-based elevation data capture approach means it is focused on major roadways. No system has yet made it to market, but both systems are being closely watched by car makers and their suppliers. Most existing adaptive lighting systems are tied to steering wheel operation, which the map-and-elevation-based solutions integrate elevation and curvature and anticipate road conditions. Intermap has an equivalent development activity with Visteon and has demonstrated the solution at recent trade events. The real brass ring for Intermap, though, is efficient vehicle operation in the context of emerging hybrid and fully electric vehicle executions. Knowledge of road geometry, ie. elevation, is more critical than ever in a world of range anxiety, energy management and regenerative braking. Intermap has yet to claim any OEM design wins, but the proliferation of interest in efficient vehicle operation both for the large volume passenger vehicle market and commercial applications promise ample opportunity. Intermap and Navteq will no doubt engage on this battle ground as well. As a side note: With map data being applied to multiple vehicle solutions there are two camps emerging around the question of whether vehicles will have a single or multiple maps on board. Navteq's original offering for advanced safety applications was in the form of a module with its own on-board map. Some questioned the ability to easily update this map, while others wondered whether each vehicle can get by with a single map for multiple functions. Recent conversations with tier ones suggest a concensus of opinion around the single-map approach. But only time will tell how the industry resolves this debate. Of course, if there will be a single map in the car and it will be shared by safety systems, higher speed networking technology may be required such as Ethernet, MOST or Flex-Ray. And, of course, attach rates for safety systems will not correlate directly with on-board navigation attach rates. Let's hope the latter issue is sorted out by lower cost navigation systems and the growing variety of location-related applications in the vehicle.

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

 

It is very strange indeed to find Toyota at the focal point of a vehicle recall imbroglio after years of immaculate quality ratings and at the peak of its global market share. But the strangeness of the timing is even more severe than that, because it was Toyota’s Prius that was used by QNX and Alcatel-Lucent to promote their “ng connect” LTE Car initiative late last year. The Toyota Prius became the mascot for the ng connect program, popping up in Detroit, Los Angeles, New York, Washington, D.C., and Las Vegas, in fact anywhere cars or automotive technology were on display. The purpose of the ng connect tour was to spread the word about the onset of 4G LTE technology and what it will mean for connected cars. Of course, the tour was also a showcase for QNX’s vision of both on-board and connected applications. Chief among the roster of on-board applications was a so-called Virtual Mechanic. The virtual mechanic is intended to provide live in-vehicle status reports on a wide range of vehicle systems including brakes, transmission, fuel, etc. with text and graphics. QNX is already the enabling software behind OnStar which, like Ford’s Vehicle Health Report feature, provide drivers with emailed status reports. The difference with virtual mechanic is that the information is live and delivered inside the vehicle. For QNX, the virtual mechanic was merely a concept shown in the context of a wide range of other concepts including in-vehicle displays of remote traffic cameras, access to Internet radio (Pandora), and a host of other location-aware and entertainment oriented applications. But the plot thickens with the emergence of Toyota’s recall nightmare because QNX is a supplier to both GM and Toyota. The virtual mechanic concept appears to belong to QNX, but the possibility for GM or Toyota to adapt the technology for their own marketing and customer relations purposes changes the prospects for this technology considerably. The question now is which manufacturer, Toyota or GM, will be first to enable a virtual mechanic-type application in the car. Or could some other QNX customer leap to the front of the queue: BMW, Peugeot, Mercedes Benz, Chrysler, Hyundai? Any one of these companies can look at Toyota’s difficult situation and realize they could be the next car company with software-laden cars producing unexplained, and seemingly unfixable, failures. A challenge for both Toyota and GM in implementing QNX's virtual mechanic will be the limited number of cars both companies sell with full-screen navigation sufficient to graphically display on-board systems. But LCD attach rates are improving for all OEMs in all segments and this application is yet another justification for large display fitment. Suffice it to say that the virtual mechanic is a concept that has arrived just in time to offer a way forward for a damaged auto maker and possibly for the entire industry. Whether QNX’s customers view this prospect from the same perspective remains to be seen. A final note: In this analyst’s opinion, the virtual mechanic will also make a great customer demonstration for car dealers. Source:  Strategy Analytics

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

At a recent telematics event in Shanghai a General Motors executive, when asked who owned the vehicle data generated by the OnStar system, said the customer owned the data. His response was somewhat misleading, and it highlighted the quandary facing the automotive industry, particularly in the wake of Toyota’s unintended acceleration woes and related recalls. What vehicle data are car makers going to collect, who will have access to it and under what circumstances? In truth, customers have little or no access to the data generated by their telematics systems. In fact, the sharing of this data is anathema within the industry. Some limited information is being shared under very specific circumstances (vehicle location, fuel level, battery charge, etc.), but the volume of data being shared is miniscule in the context of the scope of data collection. Actually, for many OEMs it is a cardinal rule to not preserve or share vehicle data for a wide variety of reasons including, but not limited to, liability and privacy. It is for this reason that companies such as BMW, Mercedes Benz and GM have not provided Web delivery platforms for preserving and reporting comprehensive historical vehicle data to their telematics customers. While it might make sense to provide complete driving and service history to the customer it is also possible that either the customer or the OEM does not want all of this information shared for the reasons noted earlier. (Of course, OEMs are particularly concerned with liability, consumers are more concerned about privacy.) Toyota’s recent recalls related to vehicle acceleration and other failures have highlighted these limitations and threaten to upend the manner in which vehicle data will be managed in the future. One early press report suggested that the current Toyota on-board systems for capturing event data were limited and definitely not able to shed light on incidents that may have contributed to driver fatalities. Whether that is true or not, it is clear, by now, that Toyota either has insufficient data to properly diagnose the problem(s) in a timely manner or is hiding valuable information from its customers and NHTSA. It is hard to envision governmental organizations such as the National Highway Transportation Safety Administration (NHTSA) resisting the urge to demand higher degrees of data collection, disclosure and analysis. (A brake override system mandate is already in consideration, according to published reports.) Consumers may demand more data as well and solutions already exist from suppliers such as Hughes Telematics and QNX. Hughes has been showing for more than three years its concept of a vehicle Website showing the status of various vehicle systems in realtime. And QNX has demonstrated comprehensive on-board diagnostics including data and graphics and complete user interface with its LTE car project in conjunction with Alcatel Lucent. Ironically, even in a perfect world, the prospect of diagnosing vehicle problems from vehicle-generated data is far from guaranteed. Still, more data is generally better and the federal government in the U.S. long ago contributed its voice to the debate. A mandate for electronic data recorders – set in 2006 - comes in to being in 2011 in the U.S. laying out requirements for data collection, retention and the terms and conditions for access to the data. Perhaps Toyota would have benefited from such an implementation. (The U.S. mandate contrasts with Europe where privacy concerns have trumped the interest in accident diagnostics thereby forestalling wider EDR adoption either voluntarily or via mandate.) EDR data, unlike telematics-related data, is typically only gathered in connection with a vehicle accident and is normally only accessible to public authorities acting on behalf of law enforcement or insurance agencies with the cooperation of the vehicle owner. OEMs that have deployed telematics systems are already capturing, processing and leveraging vehicle data whether consumers have access to this data or not. GM, for one, claims hundreds of millions of dollars in savings from warranty claims avoided by leveraging OnStar data to resolve problems before they become recalls. Most consumers are not aware of what data is being captured or how it is being used. This contrasts with the mobile market where Droid phones, for one example, ask the customer to opt into sharing location-related information. The proliferation of connected vehicles will force OEMs to reconsider their data management and sharing policies. Toyota is no doubt weighing its strategy for managing its fleet; processing vehicle failure information; sharing that information with regulatory authorities, dealers and consumers; and responding to inquiries from the public and the press. Out of a worst case scenario for the industry is likely to come a new paradigm for information sharing that will be more open and comprehensive and which, hopefully, will lead to greater peace of mind, safety and understanding of vehicle functions among the driving public.

Telematics has become synonymous with automatic crash notification and roadside assistance, thanks to the admirable and successful marketing efforts of General Motors and OnStar. But telematics is so much more than this and this story needs to be told, particularly in the wake of Toyota’s recall debacle. I have been driving a telematics equipped vehicle for the past year.  For me, telematics has meant destination and navigation assistance, movie times and theater locations, and flight arrival times, but, most importantly, telematics has been a powerful connection with my dealer. When combined with on-board diagnostics, the telematics system in my car has meant notifications for low coolant, an engine failure (although the vehicle was still able to operate), low oil level, low tire pressure, and scheduled maintenance.  In each case, the warning in the vehicle caused me to contact the concierge service for guidance.  And in almost every case, the guidance led to an on-the-spot invitation to visit the dealer to correct the problem. While saving lives via ACN is certainly a valuable contribution for a telematics system to make, it is the daily needs related to maintaining a vehicle (and preserving its function and value) that determines the true worth of a telematics system to the dealer and the customer.  With each dealer visit I have learned more about my car and forged a stronger bond with the dealer and with the brand. The combination of diagnostics and call center connection has made the ownership experience one of the most pleasing automotive experiences I have ever had owning a car. In contrast, I receive occasional mailings related to my other vehicle when the computer for the dealer of that vehicle guesses that I have crossed a mileage threshold and am due for scheduled maintenance. (For some reason, dealers – at least the ones I have worked with - routinely fail to properly set the on-board diagnostic systems to the correct mileage thresholds or time stamps, which leads to premature visits for oil changes etc.) There is a big difference between an onboard service notification – which conveys a degree of urgency – and a dealer postcard that looks like a mass mailing come-on. The value of integrating diagnostics and telematics systems has not been lost on OEMs, as both Ford and GM have introduced diagnostic elements in their respective systems. Both systems provide email notifications of vehicle status and functionality. And Hughes Telematics’ vision for automotive connectivity includes Internet-delivered vehicle status reporting. For me, though, it is the integration in the car itself that is most powerful. What is missing in some systems, though, is a more complete integration. When I call the OEM call center, the OEM should already know that a problem has been flagged. The driver shouldn’t have to tell the call center what the error code is. In fact, there are some indications that OEMs such as BMW are moving toward more pro-active messaging to customers in the event of error codes or system failures. Acura, for example, leverages the XM satellite radio connection to the vehicle to provide for direct one-way communications to specific vehicles in the event of recalls or other urgent service issues. (The market is also moving toward onboard and offboard digital manuals, but OEMs will remain hesitant to focus on enabling the customer to correct any but the simplest vehicle problems.) The next step in this process will see a more complete and comprehensive vehicle connectivity solution.  Today’s integrated telematics and vehicle diagnostic offerings fundamentally help to preserve and extend the customer relationship as well as the value of the vehicle investment. For those reasons, it is time for a more complete portfolio of integrated messaging to include leasing, insurance and warranty service partners and their information. Customers should only have to go to a single Website to manage or obtain all of their vehicle information including financing, insurance, scheduled maintenance, maintenance history, and warranty information. Bits and pieces of this kind of integration exist, but the OEM or dealer group that makes a more complete solution happen will have a significant advantage in building customer relationships and maintaining the value of the fleet. Toyota’s woes – and the many other less noteworthy recalls that regularly afflict the industry – are a wake-up call.  As more OEMs move to bring vehicle connectivity to the market, the focus will be on the leveraging of diagnostic data for enhanced dealer-customer connectivity.

While Nuance reported broad-based Q1 revenue growth across all of its divisions, growth within the mobile segment hit 12.5% YOY accounting for nearly half of total company revenue and surpassing company expectations for the segment. Nuance told analysts on its earnings call it had expected healthcare to lead revenue growth for the company. Recent wins in the mobile segment show Nuance technology moving into a wider range of applications enabling new features and functions on devices and in cars. Among higher profile wins were Ford's announcement that the next generation of Ford Sync will feature significant voice enhancements from Nuance that power the MyFord Touch driver connect technology. The next generation of Ford Sync takes advantage of Nuance’s natural language understanding to recognize more than 10,000 first level commands and provide customers with cloud-based connectivity for up-to-the-minute information and entertainment content, the company stated in its prepared Q1 earnings report comments. In addition, Nuance says TomTom recently selected Nuance text-to-speech for its navigation applications for the iPhone. Nuance recently announced that its Nuance VSuite mobile speech software is now shipping on Dell’s Mini3 Android smartphone line-up in China and Brazil. During Q1 2010, mobile royalties grew, reflecting increased unit shipments as well as increased penetration of Nuance technology on device, Nuance reported. During Q1 2010, Nuance introduced Dragon Dictation and Dragon Search for the iPhone. In addition to driving visibility, the success of Nuance’s Dragon iPhone apps has generated interest from carriers and mobile providers to deliver applications for other mobile platforms, languages and vertical markets. During Q1 2010, Nuance launched its voicemail-to-text offering at AT&T, and announced the acquisition of SpinVox, which positions Nuance to accelerate growth and expand its solutions internationally in the voicemail-to-text market, according to the company. Voicemail-to-text, in particular, was cited as a critical application to impact future company growth. Key customers and design wins in Q1 2010 included Amazon, BMW, Daimler, Harman Becker, Harley Davidson, Huawei, Hyundai, LGE, Mahindra & Mahindra, Medion, Motorola, Nokia, Samsung, Sharp, Sony Ericsson, T-Mobile, TomTom, and Toyota.

Harman announced a return to profitability for its fiscal second quarter in an earnings call earlier this week. In that call, the company detailed its marketing plan which could be taken as a blueprint for the entire industry – particularly the company’s inroads into larger volume mid-segment vehicle categories.

Harman is pursuing emerging market opportunities in China, Brazil and India with local development and manufacturing presence – including a $1B revenue target for China by 2015. The emerging market initiative is reflected also in a targeted shift of engineering/R&D balance from 99% high capital and cost (HCC) markets to 60% HCC, and manufacturing/assembly from 81% HCC to 50% HCC by 2012.

The company expects to maintain its luxury segment leadership while leveraging its previously announced “scalable system” strategy, which has already contributed to a Toyota European design win for MY2011. The scalable system is part of an initiative targeting what Harman sees as a $5B high-growth, mid-segment market opportunity reflecting the company’s desire to capture a broader portfolio of business.

In that regard, Harman wants to pioneer energy-saving GreenEdge technologies for hybrid and electric cars in partnership with Intel and Texas Instruments developing solutions to reduce power consumption by 75% including high efficiency speakers, one of the few objectives the company has yet to realize in the marketplace. Similarly, the company is working with Lotus Engineering on Active Noise Management solutions for hybrid, electric and conventional vehicles to address impending legislation regarding pedestrian safety. Noise management will also apply to in-cabin noise cancellation and reduced weight and CO2 emissions. And Harman is also targeting advanced driver assist systems, an entirely new segment for the company.

In its earnings call the company mentioned winning $2B of additional business, expanding its contract portfolio to $10B, a figure the company claims is the largest in the industry. Included in its current and recently executed order book are:

->     Infinity branded audio systems for next-generation Chrysler SRT series high-performance vehicles;

->     Launch of Mark Levinson premium surround sound for MY10 Lexus GX 460;

->     Launch of JBL premium sound for MY11 Toyota Sienna in U.S.;

->     Launch of Harman Kardon Logic 7 HD system with Range Rover for MY10 mid-model year introduction;

->     Launch of Ferrari 458 Italia equipped with Harman audio and infotainment;

->     Exclusive Haman Kardon sound lounges at BMW brand centers in Munich and Berlin;

->     Press launch of Harman/Lotus Engineering HALOsonic sound synthesis technologies;

->     Selected by BMW for next gen, high-end “Professional infotainment system for all new platforms including BMW, Mini and Rolls Royce;

->     Selected by Daimler for next gen Comand infotainment system for new Mercedes S-Class and C-Class models;

->     Selected by Toyota to provide Harman next gen scalable infotainment for vehicles sold in Europe beginning MY11;

->     Selected by Toyota to provide premium JBL branded audio for 4Runner and Land Cruiser in the U.S., Europe and Middle East and the MY11 Siena in U.S.

All of this contributes to what Harman estimates as 45% global branded automotive audio market share, with Bose at a distant 25%. Harman’s branded audio solutions are used in more than 200 car platforms from 12 OEMs shipping more than 2M audio systems annually. Sources indicate that this 500,000 units/quarter pace is actually approaching 1M units/quarter – a pace that will no doubt be stimulated by the recent Toyota wins and future higher volume segment wins.

The pace of launches has eased somewhat for Harman, which may help explain the return to profitability as profits cusually come later in the program cycle. The company hit a peak of six program launches in FY08, followed by five in FY09. The programs for those years included Mercedes, PSA, Porsche, Audi, BMW, SSangYong, Chrysler and Hyundai. Going forward, Harman says it will have four launches in FY10 (including Audi, Mercedes and BMW (2)), three in FY11 (Toyota, Mercedes and Chrysler) and one in FY12 (BMW), before ramping up again in FY13 with four: Harley-Davidson, Mercedes and BMW (2).

The company further notes the evolution of its infotainment architecture:

1997: SH1/16MB – Tuner/CD/Navi – Turn-by-Turn

2002: SH3/32MB – MMI2000 – VxWorks – Tuner/CD/DVD – Phone/SDS – MOST25 – 2D/2.5D Map

2008: SH4/512MB/1024 – MoCCA Framework – QNX CAR Platform – Tuner/CD/DVD – Phone/SDS – MOST50 – 3D Map – Internet Connectivity

2012: Intel Atomm/1GB – MoCCA & DSI 2.0 – QNX CAR – Tuner/CD/DVD/Blu-Ray – Phone/SMS/Email – MOST150 – NDS Navi – Enhanced 3D Map – Internet.

Worth noting in the architectural evolution is the growing role of both QNX (CAR Platform) and Intel (Atomm) as well as the onset of Internet connectivity - pioneered by BMW - Blu-Ray, MOST and enhanced navigation features, many of which will revolve around 3D and augmented reality implementations.

Overall, Harman appears to have emerged victorious from its cost cutting regimen with fewer European facilities but with a profitable organization in place pursuing business building initiatives throughout Europe, Asia and the U.S. The most significant business transformation of all, though, will be the Toyota wins. Not even Toyota's recent marketing stumbles can tarnish this achievement and how its will transform Harman's operations and growth profile.