Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

April 16, 2010 11:04 rlanctot
Delphi used the SAE 2010 World Congress event in Detroit this week to unveil D-Connect, its answer to Nokia’s terminal mode smartphone connectivity solution. D-Connect addresses an array of in-vehicle connectivity challenges – including automotive-oriented application stores - while defining a radical new vision of center stack architecture. The system architecture is described as being built around an Intel or ARM processor with a Linux kernel, common Linux packages, Genivi, ported device applications and, finally, an HMI layer. Availability of D-Connect is likely dependent on OEM adoption. For the U.S. market, its significance is its representation of Delphi’s vision of universal smartphone connectivity and arrives as the company emerges from Chapter 11. The D-Connect vision simultaneously provides center stack connectivity for any smartphone – reproducing the on-device display in its entirety on a large touchscreen display mounted in portrait mode – with separate interfaces for when the vehicle is static or in motion. When the vehicle is not moving, the display allows access to all the apps displayed on the device and allows the device to be manipulated and the apps to be accessed directly from the large display via touch or voice interface. The system was shown with a physical connection, though Delphi says the system will support Bluetooth, USB or Wi-Fi connectivity. The D-Connect vision includes Delphi’s announced intention to provide app store support. Delphi says it will certify applications to determine which will be accessible when the vehicle is in motion. When in motion, the separate HMI display will appear with large on-screen icons including “Voice Search,” “Navigation,” “View Maps,” and “Contacts.” The system appears to be positioned as an alternative to Nokia’s terminal mode, shown most recently at CeBit and at the Geneva Motor Show. Nokia’s solution similarly provides for vehicle HMI control of smartphone functions and is being developed by Nokia in conjunction with Tier Ones such as Harman, Magneti Marelli and Continental along with some OEMs. Both the Delphi and Nokia solutions are still in concept mode. The significance of the Delphi solution is magnified by its proposed use of a large portrait display in the center stack, its ability to be operating system and connectivity agnostic, its in-motion interface with app certification and its use of the Genivi operating system in conjunction with separate Linux packages. The use of Genivi and Linux is unique and represents the first demonstration of a complete solution based on the newly proposed automotive operating system. It also allows Delphi to define a new path to the much discussed in-car application store. As far as the app store is concerned, Delphi sees application downloads working strictly via the device and functioning through device connectivity – not through a direct download into the car. Delphi uses the Genivi operating system and other Linux-based applications, to interface to downloaded apps, but prefers to keep the applications themselves outside the center stack software environment. Delphi’s approach contrasts with Continental’s AutolinQ system, which brings Android into the center stack. D-Connect will connect with Android phones and applications but does not bring that code on-board.  To further build the D-Connect brand, Delphi has also chosen to name the actual phone application D-Connect.

April 9, 2010 15:04 rlanctot
The battle to dominate automotive connectivity has finally been taken on by Research in Motion (RIM) with the announced acquisition of Harman International's QNX Software Systems, a real-time operating system supplier focused on the automotive market. RIM had appeared to be sitting on the sidelines in recent months as fellow handset maker, Nokia, announced its terminal mode strategy and Apple grabbed multiple headlines for innovative in-vehicle connections from marketing partners. The acquisition of QNX gives RIM instant credibility as a leading automotive connectivity player and promises a spirited battle for automotive market share. The acquisition was announced this morning. The announcement says the two companies have reached an agreement for RIM to acquire QNX. The deal is subject to regulatory approval and is anticipated to close within 35-45 days. This strategic move is expected to further strengthen QNX's penetration in the automotive market and foster innovation for markets served by all parties. The move solves marketing challenges for both organizations. QNX's software is used in instrument clusters, head units and automotive Bluetooth solutions. The company had found tremendous success as part of Harman, which in recent years has come to dominate the luxury and near luxury segments of the automotive market. QNX is best known for its high-end infotainment software solutions used by Mercedes-Benz, Porsche, BMW, PSA, Hyundai and Chrysler, among other OEMs. As part of Harman, though, QNX's ability to break out into larger volume market segments was somewhat limited, and Microsoft had been winning most of the highest profile (and higher volume) automotive connectivity platforms including Fiat's Blue&Me, Ford's Sync and Kia's Uvo. At the same time, Apple was increasingly emerging as the automotive connectivity device supplier of choice for consumers and, by extension, OEMs as both the iPod and iPhone helped establish the iTunes App Store model as a compelling content, application and service delivery platform for the automotive market. It is true that some OEMs, such as Mercedes with its mbrace smartphone app, made allowances for Blackberry connectivity along with Apple's iPhone. But a growing number of OEMs, such as BMW, have been going out of their way to provide proprietary Apple connectors to enable the use of in-vehicle interfaces to access smartphone content. With few exceptions, Blackberry has been receiving no such support from OEMs and its devices remain enterprise-focused and ill-suited to automotive infotainment uses. While QNX's partnership with Alcatel-Lucent promises to target the complete spectrum of in-vehicle connectivity, a partnership with RIM opens up wider market opportunities for both QNX and RIM. The timing of the deal is ideal given that several OEMs participating in volume segments of the market have yet to launch branded, high-profile connectivity solutions. There is still time for a RIM-QNX collaboration capable of helping RIM vault into contention with both Nokia and Apple for automotive connectivity leadership. RIM also brings its unique global managed network added value to the proposition promising enhanced capabilities for in-vehicle applications that other handset suppliers are unable to match. It also presents a potential challenge to telematics service providers such as WirelessCar, Airbiquity and Telecommunications Systems. The importance of the in-vehicle connection has become increasingly important as consumers seek to use their smartphones in a growing variety of settings ranging from the home to the office and the car. QNX's existing position in the automotive market will instantly bring credibility to RIM's initiatives. It also introduces an entirely new value paradigm combining the virtues of device connectivity with the advantages of the managed network. The move is also a positive for Harman as it frees up the company to work with a wider range of software providers. Harman cannot afford to ignore the Genivi Alliance operating system, favored by its largest customer BMW. But Harman may also find it expedient to bid on Android- or Microsoft-based projects. Harman gains greater flexibility by decoupling itself from QNX. Of course, in reality the two companies will be virtually joined at the hip for the foreseeable future with a wide range of programs already underway and in the pipeline expected to extend for more than five years into the future. RIM, though, is likely the bigget winner. The company has been confronted with pressure to extend its operating system software to other industries such as netbooks, consumer electronics devices and, yes, automotive applications. The acquisition of QNX is an excellent door opener to these potential avenues of growth. QNX is in a similarly advantageous position to profit from wider market opportunities. Of course, while the move gives RIM a strong hand in contending for automotive connectivity opportunities it is likely that the merged company will continue to collaborate with Apple. QNX has a long history of supporting Apple in the automotive market including the most recent announcement of enhanced support for Apple iPods in the QNX Aviage Multimedia Suite.

February 10, 2010 22:02 rlanctot
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.

February 3, 2010 21:02 rlanctot
With the statement: "Consumers want their devices to work together, so it is inevitable that single-vendor connected solutions will lose their interest," Pioneer's senior managing director, Akira Haeno has shoved a stake into the ground for the company's Platform for Aggregation of Internet Services (PAIS). Pioneer says this new content and services platform, set to arrive formally in mid-2010, will provide a seamless home/car/work experience for different content sources and services in conjunction with any connected device. The announcement opens doors to new market opportunities for Pioneer Electronics while also opening the company up to a new range of competitors that are already aggregating content and services. But Haeno's declaration is significant considering there are several connected devices that are otherwise closed to different content and service sources. A few that come to mind are devices from TomTom, Garmin, OnStar, and Apple. The ability to bridge all of these platforms will give Pioneer an advantage against rivals such as Airbiquity, Hughes Telematics or even UIEvolution. The PAIS platform presents open-standard interfaces for voice, navigation and maps, local search, social networking, music and radio and video and television, the company says. The interfaces enable the addition of new content and services without the added investment in proprietary solutions. Pioneer's solution is a direct challenge to the strategies of competing Tier Ones such as Visteon, Continental, and Denso among others, all of whom are offering to enable a wide range of applications. Even real-time operating system supplier QNX has had to race to deliver new application interfaces in support of its technology already deployed in 12+ vehicles. The Pioneer solution is based on Windows for Automotive and incorporates VoiceBox technology but is otherwise technology agnostic. The challenge for the content and service aggregators will be to demonstrate that their solutions are truly able to seamlessly and easily deploy new applications. Ford Motor Company and Mercedes-Benz are the first to reach the market with systems sufficiently flexible to deploy additional applications. Ford relies on smartphone connectivity, while Mercedes combines smartphone connectivity with a sophisticated back-end provided by Hughes Telematics. Ford has made a software development kit available, as has Continental for its Android-based systems. Mercedes has not released an SDK but company executives envision a day when Mercedes customers could create widgets or full applications. Competitors may see a tough choice in choosing to support or leverage the Pioneer platform, but the company is early enough to market to stake a credible claim and the solution will no doubt support Pioneer's own connected offerings.

January 20, 2010 17:01 rlanctot

The single most important automotive product introduction at CES was MyFordTouch and the related software developer kit (SDK) and application programming interfaces. Competing OEMs and their suppliers are scrambling to respond to Ford's strategy which is only manifesting today what

has been in development for five years or more. In the end, Ford has created and demonstrated an ability to design and deploy new features and functions at an unheardof pace, unmatched in the industry.


Ford has finally solved the automotive industry solution development logjam and has further opened up its platform for the creation of even more new applications by third parties. This "long-tail" strategy has created a competitive environment where the OEM (or supplier) that enables or is capable of enabling the most applications will win. This does not mean that every car buyer uses every application, but it does mean that there will likely be at least a few applications that every driver will want to try - hence the long tail. It also means great aftermarket opportunities, marketing angles, and customer touch opportunities for Ford and its dealer network - "come down and get your free apps!"

The Ford announcement greatly overshadowed Kia's Uvo launch, which represented a significant advance on the original Ford Sync and is based on an updated Microsoft MS Auto platform.  Similarly, the OnStar Volt smartphone integration announcement is a mere one-off feature introduction for a single expensive vehicle due much later in 2010. Though the vehicle charge status application is necessary for the electric vehicle segment, t is not a mass market concept and it was originally shown a year ago. It does show OnStar integrating smartphone funtionality for the first time, but it is not the harbinger of an open platform from OnStar.


The mbrace announcement from Mercedes late last year was more important because Mercedes will be launching additional smartphone applications thanks to the Hughes Telematics back-end architecture. OnStar lacks the flexibility to deploy a wide range of applications in the same manner as Mercedes.

The influence of Ford's architectural decisions is reflected in the movement of Tier Ones to enable a wide range of applications across multiple platforms and operating systems. Some examples include QNX's ConnectedCar, Continental's AutoLinQ, Airbiquity's aqLink, Visteon's connectivity platform and Denso's BlueHarmony. Continental's choice of the Android operating system, in particular, reflects the objective of opening the automotive environment to a wider software developer community. Continental, in particular, announced plans for its own Androi-based SDK for Q1 and an application store due in the second half of 2010.


Even telematics service providers - Airbiquity, Cross Country/ATX, Hughes, and WirelessCar - are seeking to enable and support a much wider range of applications ranging from news, weather and sports content delivery to traffic camera display and Internet radio. And social networking applications such as Twitter, FaceBook and myspace are being enabled for embedded in-vehicle use as well.

OEMs will do well to choose hardware, software, content, operating system and service providers that are capable of rapid deployment of voice and connectivity-enabled features and functions in a safe manner via a controlled vetting process. Ford is showing the way, but there will be multiple paths to this objective.

January 13, 2010 16:01 rlanctot

Genivi Challenges Automotive OS Duopoly, Disrupts Business Models


The Genivi Alliance had a coming out party at the Consumer Electronics Show this week. Aside from the formal launch of the alliance at CeBIT in the winter of 2009, the organization has chosen smaller stages from which to tell its story and attract additional partners. At the CES show, however, Visteon raised the Genivi flag high in introducing new automotive infotainment solutions.


Genivi is currently positioned in the industry as an alternative to Microsoft and QNX as an automotive operating system for a range of cockpit applications. The business models of these three organizations differ significantly, though, and the objectives of the Genivi Alliance are not strictly related to taking the place of either of Microsoft’s automotive OS offerings or QNX. The stated objectives appear more closely aligned with reducing development costs for OEMs and, more recently, may include shifting ownership of intellectual property to the OEMs as well.


QNX and Microsoft are not the only operating systems available to automotive suppliers. There still remain multiple Linux distributions – including the recently emergent Android being positioned for automotive applications by Continental - as well as versions of M-Itron. But when it comes to the development of the most advanced automotive cockpit systems on the road today, QNX and Microsoft are dominant.


When it comes to business models, the two companies differ significantly. Microsoft has a reputation for being expensive, but mitigates the expense with marketing dollars. QNX takes a more traditional approach to software licensing and is a much quieter player in the market, from a marketing or marketing dollars standpoint. Microsoft has found success in both the high-end infotainment segment and the low end (Ford Sync, Fiat Blue&Me).


QNX has seen much of its deployments in the luxury segment in connection with parent Harman International, but has also had its share of success in Bluetooth solutions, instrument clusters and GM’s OnStar system. QNX’s most recent success has centered on its work with Lexus and parent Toyota which appears to have opened the door to additional business in Japan. QNX claims in excess of 12M cars deployed with its software.


The Genivi strategy, rooted in the shared-code model of Linux, is designed to speed product development by identifying and distributing those layers of operating system code that are identical across platforms. Of course, all operating systems have an element of shared code, but the Genivi approach creates a “star chamber-like” panel of alliance members that vet new additions to the underlying shared code, presumably leaving ample room for alliance members to differentiate their solutions in higher levels of the software stack such as HMI are other application-specific areas.


Genivi had its CES debut in the Visteon booth. While one physical platform was shown based on an Intel ATOMM processor, executives said it could be swapped out for solutions from competing silicon suppliers such as Renesas or Freescale, depending on the customer requirement. This is one element of the Genivi platform, like other industry platforms it is intended to allow virtual plug-n-play swapping of processors and other system elements.


Visteon executives noted that the initial release, Genivi 1.0, occurred December 17 and the organization is now in the midst of a 21-business day review by its membership. Genivi announced that it surpassed the 50-member mark before CES including such significant partners as Renesas and Nissan. The Genivi 1.0 review is to be completed Jan. 21. During the period of the review the Board of Genivi may receive, via its executive director, any potential member claims of IP which were not contributed by the member under the terms of the IPR policy that they feel are infringed upon with the candidate release. The review period is also indeed to perform a careful review of the documentation of inbound and outbound licensing of the components included in the release. In no notifications occur, the board is expected to vote in a meeting Jan. 27 to release Genivi 1.0. Otherwise, the Board may delay until IP notifications are research and resolved or until license documentation is complete.


Because Genivi is so new, rumors continue to swirl around critical business model issues such as IP ownership by OEMs implementing Genivi solutions and around the extent to which it may creep into upper levels of the software stack such as HMI and the application level. For now, the industry will have to wait for its chance to see the first implementation.


Genivi will coexist in the market with both QNX and Microsoft including in some of the same systems. This is true for Android as well, which will not replace QNX or Microsoft in the short run. In the end, while additional versions of Linux will continue to emerge and find a place in the automotive market, the duopoly of Microsoft and QNX is likely to persist for some time. Genivi stands to have its greatest influence over time as additional layers of code are added. Participants in the alliance will be watching most closely to see that their value add contribution is preserved.

December 22, 2009 22:12 jcanali
As Strategy Analytics anticipated, the market for digital maps has quickly shifted in the wake of Google’s entrance into turn by turn navigation. In the contrast to Google’s recent announcement to pull away from Tele Atlas as its primary map supplier, Microsoft (MSFT) and Navteq have entered into a “new chapter” in their ongoing partnership in what has been deemed as “a true 'win- win' for both companies” as stated in a recent press release.  While by no means a merger, the implications of this partnership could prove to be extremely far reaching.  Microsoft and Navteq/Nokia have technologies which extend into computer software, computer operating systems, mobile software operating systems, search engines, mobile hardware, and automotive platforms as well as the wealth of location-based data owned by Navteq.   This may prove even more significant as Google has recently leaked its intention to expand into the mobile hardware market. The most immediate benefit will be the use of Microsoft technology to create 3-dimensional, street level maps, which MSFT calls Streetside, for its Bing Beta Maps.  As more PNDs become connected, the ability to house 2D/3D maps onboard while storing street level maps off board will be an important selling point and help to differentiate PNDs from mobile phone navigation.  Street view maps are a fun application, but lack the accuracy for reliable automotive navigation.  Developing a seamless way to switch from street views to more accurate 2D/3D maps will help PNDs to better differentiate themselves from smartphones as PNDs provide better automotive usability. The growth of the connected PND market and smartphone navigation solutions can be seen in Strategy Analytics’ recently updated database listed below: Portable Navigation Multi-Feature Device Specification Database In addition to achieving better quality maps, Navteq has strengthened its position by gaining greater access to consumer markets for smartphones and connected PNDs, and could benefit from Microsoft’s strong position in the automotive market, especially in terms of volume cars equipped with Ford SYNC or Fiat Blue&Me and a system that is currently in the works with Hyundai.  While Google is a company with massive resources and a proven ability to flawlessly execute plans, perhaps the strength of its position in automotive and LBS has been overstated by many in the industry. Garmin should benefit from its close relationship with Navteq, while Tele Atlas/TomTom needs to evaluate its future and ponder potential strategic partnerships of its own.   Although Tele Atlas/TomTom has said that it will continue to focus on accuracy and innovation, these words seem more like hollow executive speak than a signal that Tele Atlas/TomTom believes its business model is still functional.  TomTom’s recent decision to slash the price of its iPhone application in half, from $99 to only $49, seems to belie assurances that everything is alright at the Dutch Company. In terms of Microsoft, the partnership helps Bing better target the mobile and automotive search market that Google seeks to dominate.  Strategy Analytics recently detailed Google’s competitive position in the report:  Competitive Position Analysis of Google in the Automotive Market Google has not been shy about its wishes to dominate mobile and automotive search, in fact, at Navigation and Location 2009 in San Jose, CA, a representative from Google stated, “it is advertising, not navigation that we are after.”  This makes search a vital component for deriving revenues from LBS solutions.  Microsoft is prudently looking to bolster its position against Google’s rapid push into LBS by partnering with Nokia. As reported here, by Telematics Update, the new Bing Maps will include a free voice-enabled search application, allowing the driver to access maps, directions, and traffic without compromising the wheel of their car.  The hands free application will cue the driver will visual signs rather than audio responses, thus giving Microsoft a potentially more powerful value proposition to potential advertisers as well as a solution that drivers may prefer. Still, the battle for dominance in automotive and mobile phone search is just beginning and long battles often make for strange bedfellows.   Google’s decision to pursue mobile phone hardware is certainly going to upset the likes of Motorola, who were relying heavily on the success of Android based phones.   This comes on the heals of pulling away from Tele Atlas and offering free TbT on Android, a platform on which Garmin is building navigation-centric Nuvifones.  While Google’s slogan, “don’t be evil”, may continue to resonate with consumers, these moves may have engendered distrust with potential strategic partners.      With many major players have yet to weigh in including automotive OEMs, Google may be viewed as too ambitious for potential partnership.      Meanwhile, Apple, a darling of many consumers, has yet to fully weigh in, but has not ignored LBS quietly acquiring Placebase last July.

December 2, 2009 15:12 rlanctot
TeleCommunication Systems (TCS) has announced that it has entered into a definitive merger agreement to acquire Networks In Motion for an aggregate of $170M. The merger consideration will be paid in a combination of cash, TCS common stock and promissory notes. Networks In Motion's Board of Directors has unanimously adopted the merger agreement and recommended its approval by Networks In Motion's stockholders. The acquisition accelerates TCS' position in enabling mobile operators to offer enhanced location-based data services. The move by TCS reflects the relatively quiet success achieved by Networks in Motion and TeleNav and a couple of other companies in building a highly profitable business around a combined base of approximately 20 million+ subscribers to navigation applications for mobile phones. The $170M valuation also helps TeleNav which is approaching an initial public offering. The announcement is potentially bad news for Google which recently entered the smartphone navigation space with its free turn-by-turn navigation application for Android-based phones. NIM's relationship with Verizon will likely result in Verizon-only capabilities being leveraged in the market, such as probe-based traffic data, which Google will be unable to match due to its much smaller base of users. According to Strategy Analytics estimates, Android-based smartphones will represent approximately 10% of all smartphones in 2010, but only a subset of these will be compatible with Google's TbT application and only a subset of these will actually download the application. Nevertheless, the navigation on smartphone business opportunity has again proven to be more significant than originally thought, now representing a market worth, in total, as much as $2B. Much of this value is deriving not only from the application subscriptions but also from the sale of additional "premium" content, such as traffic data, or updates within the applications, not unlike other profitable application segments, such as on-device gaming. In the end, carriers are more likely to support navigation partners that provide a path to profitability from subscriptions and in-application sales versus free applications such as Google's Tbt offering. So, while Navigon will continue to dominate the iPhone navigation segment and Google will increasingly rule the Android world, a combined TCS/NIM will grow stronger via its relationship with Verizon. Of course, TCS/NIM will also benefit from offering a more fully evolved and acceptable navigation solution relative to the Google offering.

November 4, 2009 20:11 jblight
On 29-Oct-09, Google launched Google Maps Navigation (Beta) an internet-connected GPS navigation system with voice guidance.  It is part of Google Maps for mobile and is available for phones with Android 2.0.  This move will massively boost consumer adoption rates for navigation on smartphones and put huge pressure on the PND and connected PND market.  Google also leads as the preferred consumer navigation brand on mobile devices with consumers across the US, UK, France and Germany.  The move however does not spell disaster for navigation device and solutions vendors.  Market opportunities for navigation and location products, features and apps will be characterized by segmentation and product differentiation.  The key to successful business models is in understanding consumer price, feature, feature sets and usability preferences. Lessons can also be drawn from the digital camera and portable music player markets.  The full implications of the Google Navigation Beta launch on navigation competitive dynamics are discussed in the new Strategy Analytics report ‘TomTom and Garmin Will Survive Despite Google's Entry Into Turn By Turn’.  The key conclusions are:  1. The navigation market is still far from becoming a ‘de-facto Google navigation and location monopoly’. Offering free turn by turn navigation will not guarantee total market dominance for Google.  Google’s entry into turn by turn navigation will however result in a major shift in the competitive dynamics.  In Strategy Analytics’ view, Google still faces significant competition, particularly from Nokia-Navteq and Microsoft.  2. Comparisons and lessons can be drawn from the digital camera and portable music player markets. Two years ago the camera became a widely available feature on phones but the standalone camera market is still healthy and opening up new product opportunities including for GPS and connected camera and video devices. Free Google turn by turn navigation will not spell the immediate death of all the other product alternatives, most notably PNDs.  The introduction of ‘free’ navigation on smartphones, can be arguably compared with the introduction of the camera and digital music features on wireless handsets.  According to Strategy Analytics Global Wireless Practice, ‘cameras on phones have been just about the most popular feature launched in recent history (apart from voice and SMS)’.  However the portable digital camera market didn’t die as a result. 
  • According to Strategy Analytics Digital Consumer Practice, over the period 2003 to 2009, global shipments of digital cameras grew from 49M units to 116M units.
Similarly, the rapid integration of digital music playing capabilities onto handsets has not stifled the growth in dedicated digital music devices.
  • According to Strategy Analytics Global Wireless and Digital Consumer Practices, global sales of wireless handsets with music playing functionality has expanded significantly, rising from 48.1M in 2004 to 793.9M units in 2009. 
  • Yet sales of dedicated digital music players continued to expand simultaneously, rising from only 26M units in 2004 to 141M units in 2009.
3. Monetization and product differentiation are the key challenges. Strategy Analytics has long argued that monetization and product differentiation are the key challenges facing all vendors aiming to develop business models in the navigation and location market.  The competitive landscape will continue to be highly dynamic due to increasing wireless market complexity.  4. Clearly targeted consumer experience research of navigation and location is critical. More consumer research is required to identify the highly segmented consumer preferences for: different navigation products, apps and services; the bundled features sets of those products; the quality thresholds and usability of the navigation and location applications; brand preferences; and the price points and price models that are going to be most successful in different target markets.  5. Market consolidation can be expected particularly between navigation solutions providers. The competitors in the value chain most exposed as a result of this move by Google are the suppliers of navigation solutions to the wireless operators.  Increasing distribution routes to market, and developing navigation and location products will be costly and small specialist players are vulnerable.  It can be argued that there will now be significant questionmarks surrounding the 30-Oct-09 announcement that TeleNav has filed for IPO. As Strategy Analytics’ indicated in the Oct-09 blog 'Wireless Devices and Operator Solutions the Next Big Push for TomTom', there will now be distribution and other business opportunities to be gained from consolidation between players.  These issues can explored further with Strategy Analytics analysts in person at the forthcoming Navigation and Location USA Conference, 1-2 Dec 2009.

October 16, 2009 15:10 jcanali Most consumers recognize Google Maps, yet few knew that Google Maps had rested on map data belonging to others, at first Navteq and then Tele Atlas. Navteq and Tele Atlas have dominated the lucrative business of supplying map data, a position that many believe will grow increasingly lucrative as location based business opportunities increase. While there have been rumblings that “crowd source” mapping would soon threaten Navteq and Tele Atlas, these maps would unlikely be sufficiently accurate for commercial use. With major barriers such as, heavy infrastructure costs for developing and maintaining maps, Navteq and Tele Atlas appeared comfortably in control of the maps data market for the near future. Leveraging its brand recognition and heavy user traffic, Google has announced that it will now use maps based upon TIGER (provided by US Census Bureau) maps, an undisclosed third-party, its extensive StreetView data, and crowd sourcing. While this only applies to the US, the implications are vast. Google has un-tethered itself from the weighty licensing fees and conditions that Navteq and Tele Atlas attach to their data, though Google’s freedom comes at the expense of map accuracy. Navteq and Tele Atlas have made a business of having high quality maps and these have been extremely important for automotive navigation. While Google has proven that it can work rapidly, in 2008 Street Views imagery saw a 22-fold increase, Google will still need some time to catch up in terms of quality. The degree of quality that Navteq and Tele Atlas offer are not required for all location based applications. Google could quickly provide first rate maps of major metropolitan areas, these areas will prove to be the most lucrative as location based opportunities emerge. While these maps might not be appropriate for automotive navigation, there is certainly opportunity with mobile device applications. Recently, Google’s CEO, Eric Schmidt has said, “We can make more money in mobile than desktop eventually because the mobile computer is more targeted. You carry your phone everywhere, it knows all about you, it knows what you’re up to. We can do a very, very targeted ad. Over time, we’ll make more money from mobile advertising”. Untying itself from Tele Atlas, Google can offer maps and an API for others to use these maps without being saddled with licensing restrictions which severely hampered efforts to deploy ad-supported applications. In the longer term, Google will certainly aim to rival Navteq and Tele Atlas, as controlling map data will put Google in a more secure position on the location based opportunity value chain. The relative comfort of a virtual duopoly has been shattered; Navteq and Tele Atlas will need to focus on providing better maps and faster updates at lower prices with fewer restrictions. Navteq (owned by Nokia) and Tele Atlas (owned by TomTom) boasted strong strategic relationships within the location based market, Google will certainly look for greater integration on Android phones. While this announcement is concerning to Navteq, it is painful to TomTom/Tele Atlas. Google is likely already positioning itself to use its own maps in numerous countries across Europe. The competitiveness of TomTom/Tele Atlas might well be strengthened by the development of more wireless operator relationships for navigation and location applications, but maybe this is too late. Strategy Analytics has also examined consumer brand perceptions of Google within the navigation market in the Oct-09 complimentary webinar at: Strategy Analytics has recently examined Google’s entrance into the automotive market: