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

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

Denso privately showed an Internet connectivity platform called Blue Harmony at the Detroit Auto Show this week. Despite its name which suggests an emphasis on Bluetooth, Blue Harmony is actually built around a 3G cellular connection enhanced with Wi-Fi for internal and external communication and Bluetooth. It is designed as a center stack solution with full-size, touch-screen display for navigation and other functions. The announcement shows Denso offering its own all-purpose alternative to similar solutions from Continental and Visteon. Blue Harmony's introduction reflects the ongoing efforts being made by Tier One suppliers to provide for smartphone integration and application downloads. Blue Harmony is designed to function with a variety of hardware and software configurations. The positioning of the system is clearly targeted at higher end applications as opposed to simple Bluetooth connectivity offerings such as Ford's Sync. Denso is being specific about the broad range of functionality enabled by the Blue Harmony system, but is being deliberately ambiguous about specific component partners and HMI, leaving these choices to potential customers. The stated objective of Blue Harmony is to enable connected consumer applications including access to music, news and traffic information while enabling safe implementation of social networking applications such as Facebook and Twitter. Flexibility and customizability are critical elements of the system including the ability to download applications capable of enabling services such as Pandora Internet radio. OEMs will be able to target different consumer segments with customized user interfaces or different application portfolios. Blue Harmony will also deploy a wide range of voice-enabled applications such as news readers or messaging. And in addition to Wi-Fi technology, the system also incorporates vehicle-to-vehicle communication capability.

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

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

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

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

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

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

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

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

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

Mercedes-Benz launches its Mbrace 3G-based telematics system today as standard equipment on all models except the GLK, the E-Coupe, the SLK and C-Class cars. It is an option on those models. The first six months of service are free and $280 a year after that. Keeping the concierge service costs $20 a month. The new system sets a new standard for smartphone integration, upgradability, voice recognition, dealer-customer integration, car-phone-PC integration, and customer support via three call centers one each for roadside assistance, concierge and emergency calls. Mercedes has been quoted as saying that it plans to add an application store and is also looking at enabling access to concierge and other services via the customer's phone, independent of the car. The bottom-line is the system is intended to be future-proof. The announcement marks the beginning of a transition by Mercedes away from current TeleAid telematics service provider ATX toward Hughes Telematics. The Hughes Telematics vision of service provision ultimately includes satellite and Wi-Fi connectivity, but the Mercedes system launches with 3G cellular connectivity. (Hughes' plan also calls for Website management of vehicle status and diagnostics. It is not clear how much of this capability, if any, will be available at launch.) The significant aspects of this industry changing announcement includes: -> VoiceBox natural language understanding voice engine. - Mercedes is the second OEM, after Lexus, to implement this technology which allows users to make naturally spoken requests for information and assistance either for controlling the car or for location information. The voice recognizer can speed access to information regarding weather or location data, for example, by eliminating the need to connect with an operator, but the operator is still available if the voice recognition fails. -> Three call centers for processing different types of calls. - Most telematics systems use a single call center for processing all types of calls. The Hughes system behind Mbrace has separate call centers for ACN or emergency calls, roadside assistance, and concierge services. -> Upgrade and updatability - Applications can be added wirelessly or at the dealer. -> Connectivity to customer phone - Vehicle doors can be locked or unlocked remotely via smartphone. The vehicle can be located in a crowded partking lot via smartphone app. If the vehicle is stolen, the user can be notified via text message. Additional smartphone functions will be available and an "app store" is in the works. Bluetooth connectivity is also provided for. -> Access to off-board information - Routes and POIs can be sent from Google to the car. (The Hughes vision ultimately calls for Website management of vehicle status and content ranging from audio and video files to service status and remote diagnostics. Mercedes will either be enabling these capabilities at launch or shortly thereafter.) -> Dealer connect - The system will connect the nearest Mercedes dealer if there is a problem. -> Automotic collision notification - Activated in the event of an airbag deployment or by a press of the SOS button, a Mercedes operator will get on the line, notify 911 and stay on the line until help arrives using vehicle coordinates. -> Real-time weather and traffic reports - Also provides real-time assistance in the event of a disaster. An operator will help locate shelter or alert family members. -> Concierge service - Access to a representative who will help make dinner reservations, order flowers, buy tickets to the opera, or book a flight. -> Access to services via phone - Mercedes may eventually allow access to services via phone independently of the car. Link to Wired News story: http://www.wired.com/autopia/2009/11/mercedes-mbrace-telematics/ Related Strategy Analytics reports: Telematics as a Downloadable App Arrives - http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4973 App Stores Coming to the Automotive Market - http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4802 27M Users of eCall and Infotainment Services by 2015 - http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4428 Economic Climate Demands Sharper Connected Vehicle Business Models - http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4425

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

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