AUTOMOTIVE MULTIMEDIA AND COMMUNICATIONS

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

May 5, 2010 13:05 rlanctot

TomTom interrupted the epitaph writers last week with a spunky earnings call and a stunning customer presentation ushering in a new portable navigation device architecture and strategy modeled on the mobile phone market. The earnings report was significant both for the company’s ability to parry analyst skepticism and its self bestowal of the title: “fastest growing European telematics company.”

 

Skepticism surrounding TomTom’s ability to continue to grow and do so in a profitable manner was laid to rest by the Q1 2010 report which showed a 26% increase in revenue and a profit. The revenue gain came in spite of declining PND sales overall with TomTom claiming market share gains in Europe and North America.

 

The skepticism was expressed by multiple analysts on the earnings call repeatedly questioning the short- and long-term impact on TomTom of smartphone navigation. TomTom executives were quick to point out that 10M navigation application downloads, as reported by Nokia, did not directly translate into regular, daily use of smartphones for navigation.

 

TomTom’s broader survival strategy became clearer from a quick review of the earnings report which showed its non-consumer lines of business – a newly created categy – capturing 31% of revenue in Q1 ’10, up from 24% in ’09. The non-consumer segments consist of TomTom Work, licensing and the automotive business. (TomTom reports a 40% attach rate for its solution at Renault and claims 10% automotive market share as its solution is extended to additional Fiat and Renault models.)

 

TomTom Work showed 41% subscriber growth year-on-year to 104,000, well short of the 300,000 subscribers targeted for 2011, but enough to justify TomTom’s claim of being the “Fastest Growing Telematics Company in Europe.” The figure is even more important when one considers this is one of the highest gross margin businesses in TomTom’s portfolio, according to the company.

 

To round out the rosy picture TomTom pointed to the 700,000 Live Service enabled devices currently in use by consumers enabling a range of service and content transactions (including sharing of traffic and speed cam data), all of which are also exceptionally profitable to TomTom, again according to the company. With its newly announced webkit architecture strategy and adoption of the smartphone app store model (http://bit.ly/9q1jIV), TomTom hopes to build this user base.

 

An interesting note to this effort to build the TomTom user base is the fact that TomTom says it will no longer provide quarterly reports of device unit sales or average selling prices. The reason for this reticence is the company’s stated intention to alter its business model to build the base of users. Clearly TomTom is alluding to the potential for subsidizing sales of PNDs along the mobile phone model – a strategy long toyed with by the industry but never fully adopted.

 

TomTom did not specifically confirm its intention to subsidize PND sales. But this interpretation is supported by the somewhat ambiguous comments expressed in the earnings call and in the context of its plans to build its subscriber base.

 

Once TomTom has brought its open platform and app store model completely into the marketplace, expect subsidized devices, particularly among the new, simplified TomTom Ease line. The objective is to build a larger user base producing a wider range of shared location information which will become increasingly accurate (traffic) and useful (user evaluations) as the subscriber community grows.

 

TomTom’s aim is to achieve daily relevance from daily usage by a wide subscriber base. To further hedge its bets TomTom is adding new automotive relationships – such as Ford’s announced intention to use TomTom maps and content – and continuing its expansion into emerging markets (Ukraine, Morocco, Mexico, and India) where further PND growth is expected. The pieces are falling into place for Europe’s fastest growing telematics company, which has chased away the skeptics once again.

 

Further Insight:

 

http://bit.ly/cMw4f1 - Solid Q4 for PNDs, but 'Free' Navigation is Shaking Up Monetisation - John Canali – Automotive Multimedia and Communication Service

 

http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 - Nitesh Patel – Navigation and Location Opportunities

 

http://bit.ly/8Yo4U6 - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel – Navigation and Location Opportunities


May 5, 2010 12:05 rlanctot

Telmap has flipped the switch on its direct to consumer smartphone navigation strategy shifting entirely to the white label approach the company has pursued for many years with operators. The company expects the new positioning to give it a competitive edge vis a vis Nokia and Google and vault it into a global leadership position.

 

Prospects were looking bleak for Telmap when industry heavyweights Google and Nokia began offering free navigation applications for smartphones. Google made the application available as a download for iPhones and, more recently, Android-based phones, while Nokia recently began including navigation on its handsets.

 

The Telmap strategy overturns both of these approaches by working through wireless operators, a strategy pursued by both TeleNav and Networks in Motion (now part of TeleCommunications Systems) in the U.S. But Telmap is taking the approach on the road with partners throughout Europe, Asia and Latin America.

 

Telmap is taking a three pronged approach providing:

 

1)      An off-board application with local search and navigation that can function with all operating systems;

2)      A location platform with APIs to facilitate the distribution of any and all location applictions;

3)      A Web-based application that allows for desktop management of location applications and synchronization with the phone.

 

The initial launch of the new positioning will manifest in O2 Germany delivering 30 handsets by the end of May all equipped with the Telmap technology. In fact, Telmap says it is already seeing 500-1000 new activations per day based on the new approach.

 

The white label is ideally suited to the shift, in Europe, to a bundled model for applications and services. Navigation is increasingly being provided at no charge, so the model has shifted to enabling different billing and payment methods for selling enhanced content and applications.

 

The white label strategy gives Telmap a strategic edge because it allows the operators to introduce a cross-platform solution that can be advertised and promoted across their entire handset line-up regardless of handset supplier or operating system. Telmap hopes operator support will help juice its subscriber base, which currently stands at approximately 1M in Europe and 1.5M globally.

 

And operators are keenly interested in exploiting the location opportunity because, thus far, the margins have been quite high, according to Telmap executives. To keep that revenue flowing, Telmap is enabling integration with ultra local content and services such as Coyote safety camera apps in France and road charging services in the U.K.

 

Additionally, the free Telmap application allows for premium upsells and a variety of booking and payment methods along with advertising. And by using the same platform across the entire line, operators retain control and customers can communicate and network with one another.

 

The gamble for Telmap is that the operator-centric approach will trump the Nokia handset-side approach and the Google app-store strategy. The concept of leveraging operator advertising and promotional support is a powerful one. Google tried to take its Nexus One handset directly to the market only to knuckle under to operators in the past week.

 

The strength of the strategy is reflected in the tight relationships between Networks in Motion/Verizon and TeleNav and AT&T/T-Mobile/Sprint in the U.S. These partners are working on additional enhancements to the navigation and location platform which is producing millions of subscribers and hundreds of millions in revenue.

 

From a branding standpoint, location applications will come to define and differentiate the operators and a cross-platform solution makes it much easier to leverage and control. The attraction of the Telmap approach is already apparent as the company touts among its operator supporters: Vodafone, O2 Telefonica, Orange Group, Singtel Group, IUSACell, Pelephone, Cellcom, Mobilcom, and Boost Mobile, among others.

 

Of course, tiny Telmap is taking on industry giants in Nokia and Google and regardless of the strength of its strategy lacks the brand awareness and marketing clout of either of these companies. But the shift away from a consumer direct strategy to white label is probably the last best chance for Telmap to move into the front rank of LBS market leaders. And the company is investing heavily in ultra-local tie ins across the many countries around the world where it competes.

 

Wild cards remain in the battle for dominance of the location aware marketplace. One such wild card is the creation of superior traffic information from probe data. Google’s initial efforts to convert Droid phone user data is beginning to get attention and RIM (following its QNX acquisition) is likely to be the next company to bring a probe-enhanced traffic service to the market. Nokia (Navteq) and Apple will likely be next leaving Telmap to ponder whether it can convert its operator relationships into a superior traffic solution of its own.

 

With the smartphone navigation market ruled as it is by a confluence of advancing technology and consumer preferences, only two things are certain: change and Telmap’s determination not to raise the white flag.

 

Further Insight:

 

http://bit.ly/cMw4f1 - Solid Q4 for PNDs, but 'Free' Navigation is Shaking Up Monetisation - John Canali – Automotive Multimedia and Communication Service

 

http://bit.ly/bMeg36 - Global Mobile Handset Navigation Forecast 2004-2014 - Nitesh Patel – Navigation and Location Opportunities

 

http://bit.ly/8Yo4U6 - Nokia & Google Shake Up $3.8 B Handset Navigation Market - Nitesh Patel – Navigation and Location Opportunities


April 30, 2010 11:04 rlanctot
TomTom CEO Harold Goddijn must be reading this blog or we are reading his mind. In a post on March 6th (http://bit.ly/aVONfo), we suggested TomTom needed to open its platform to developers and adopt the app store model on a wider scale. TomTom announced its intention to take these very steps at its customer event this week - embracing the app store approach and offering apps to customers by the end of the year, according to a report on pocket-lint.com (http://bit.ly/b5t6jh). It is worth noting that TomTom was the first and only PND maker to create a connected community of users able to share content and map updates. TomTom's Home application also allowed users to purchase applications online. But the platform was closed to third parties, even though TomTom users could record and share their own navigation voices and favorite routes. The new initiative represents a radical shift and a bold gamble on an entirely new business model and hardware and software platform that brings TomTom into more direct alignment with the mobile industry. It also represents a further departure from chief rival Garmin which will still have a closed platform. The report quotes Goddijn: "What is happening here is a break from the past. We have a great infrastructure, but in 2009 we decided it wasn't good enough moving forward. We decided to break the code and move on to new architecture both on the device and the backend." According to the report, the strategy calls for deployment of a webkit-based operating system and the introduction of new technologies in all new TomTom devices in the coming month to "create a platform for ... both the consumer and automotive market." The plans represent a major overhaul of how TomTom offers its services and delivers its navigation software and a direct response to pressure from the mobile phone market where application stores have become the de facto standard for application and content distribution. The new TomTom platform, based on the open source webkit browser engine is to arrive before the end of 2010, though TomTom did not specify a date. The choice of Webkit is significant given TomTom's plans to broaden its footprint in the automotive market where an open platform will facilitate integration with automotive systems. The Pocket Lint report further notes that a separate TomTom presentation described how the company is already evangelising how apps like Wikipedia, tourist guides like Time Out and others, such as piste maps, might help people get a better idea of where they are going. And the company said it was looking at the possibility of adding augmented reality to the mix possibly as a third party offering via the anticipated app store. On the hardware side, the company is preparing the launch of the first device built around the new architecture: the TomTom Go Live 1000. In a drive to keep costs down, Pocket Lint reports that TomTom has opted for the ARM 11 500Mhz processor and a separate Broadcom GPS chip rather than a Qualcomm Snapdragon processor that promises to do it all. Pocket Lint says TomTom hopes to leverage relationships with Volkswagen, BMW, Fiat, Ford, Renault, Toyota and Daimler. TomTom says it will be able to allow car makers to customise the UI, use webkit to provide a "great" programming environment that makes it easier to talk to the other systems of the car (like the heating or air conditioning), as well as deliver over the air (OTA) updates thanks to built-in connectivity (ie a SIM card), something that will no doubt appeal to car makers, normally slow to implement new technologies in the latest models.

March 29, 2010 17:03 rlanctot
I have been using TomTom’s XXL 540S World Traveler for the past two months in multiple locations in the U.S. as well as in the U.K., Germany and France and I can safely say this is a dangerous device. It is dangerous because it effectively leverages historic speed profile data to deliver accurate routing and travel time without live traffic data. The XXL 540S is dangerous because the effectiveness of its routing, without accessing live traffic data of any kind, turns the growing traffic data industry on its head. The historic speed profile data calculates routes based on historic speed measurements for every time of day and for every road segment, from large highways to small local roads, and includes TomTom’s IQ Routes technology. In comparison to on-board systems with enhanced traffic data, the routing and time of travel on the TomTom was comparable. I am sure I am not the only user of navigation devices and technologies who has been frustrated with the traffic information experience. I have had both positive and negative outcomes and, in spite of the negatives, I am still a believer in the power and necessity of traffic information. I recently steered clear of purchasing an opening price point PND for the very reason that it lacked traffic information. But sometimes, one is willing to accept sacrifices to achieve a greater good. In this case, that greater good is a single device for automotive navigation in North America and Europe. The sacrifice of traffic data is a small price to pay especially considering what the cost of adding traffic information for both geographies would likely represent in added subscription fees covering multiple suppliers. (Hint: The first traffic supplier with a universal solution will gain a huge advantage.) For anyone seeking a single device for vehicle navigation in North America and Europe with built-in traffic camera data and 7M POIs, the XXL 540S is ideal. (The device was even able to locate a runner’s specialty store buried in a mall in Sindelfingen, Germany, as well as functioning in a pedestrian mode trying to locate the next nearest towns in the French countryside outside Geneva.) On the downside, a shortcoming of the device is its rigid programming. It is not possible to use it as one would Google maps to pick a starting point and destination unrelated to a current location, for example. A more flexible solution will be necessary as user expectations change. If PNDs like the XXL 540S cannot offer functional equivalence to other navigation solutions, consumers will be disappointed. Switching between maps is also less than intuitive. But I can understand TomTom’s disinclination to add yet another layer to its busy user interface. When entering a destination for a new geography, the user eventually has the option to change the map. The device stores prior routes separately for each different map, which is a nice touch. In addition, the integration of user evaluations so widely available in competing connected solutions certainly pose a threat to disconnected PNDs like the TomTom device. But as a single function device, the XXL 540S delivers in spite of the missing traffic info and connectivity.. For the XXL 540S World Traveler the combination of on-board data and the access to software updates perfectly substitutes for a more robust offering of regionalized live traffic information. More importantly, the device points the way toward future product development at TomTom and other PND makers. The pocketable device (yes, even with a five-inch display) is convenient enough for world travel and amazingly, the user will make no sacrifices in POI content or even map updates – additional POIs can be added via the Home application. The device connects to the TomTom Home software application for map updates and other enhancements. Flash has clearly displaced the HDD as the preferred storage medium for PNDs and the XXL 540S has 4GB of storage. At $299.99 retail (a little pricy) the device also includes TomTom’s “Help Me!” button and lane guidance. The TomTom even showed a roundabout where the on-board system against which it was being compared only showed a standard intersection. Of course, with the map update capability, the TomTom should always have superior map data. Even as PND makers experiment with larger screens, as in the case of the XXL 540S, the devices themselves will get smaller and prices will continue to fall. Connectivity and more creative deployment of location-aware applications will be critical to the future success of the segment. Additional Insights: http://bit.ly/cMw4f1 Solid Q4 for PNDs, but ‘Free’ Navigation is Shaking Up Monetization (AMCS) – Canali http://bit.ly/a8WqRJ - A Role for PNDs…If They Get Connected - Blight http://bit.ly/c5f65I - Automotive and Portable Navigation Market Forecast 2008-2016 (AMCS) - Blight

March 16, 2010 19:03 rlanctot

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.


March 5, 2010 12:03 rlanctot

TomTom was once the darling of the portable navigation market, charging onto the scene with innovative marketing and product offerings and buoyed by strong market growth driven by Europe’s world-leading embrace of navigation devices. The latest earnings results from both TomTom and chief rival Garmin, however, paint a picture of a hot hardware market segment hitting a plateau.

 

Is it game over for TomTom? How did the company peak so soon? Where has the growth in the PND segment gone? It is my contention that one reason for the current decline in prospects derives from the company’s shift to a closed platform back in 2005 more aligned with rival Garmin.

 

TomTom captured the imagination of consumers and industry observers in the early days of the PND market with innovative solutions that included one of the first major crowd sourcing exercises in the form of its TomTom Live services which included map updates provided by users. The power of the TomTom Live platform was such that TomTom was able to build a more than million-strong user community whose enthusiasm was reflected in both the millions of map updates and corrections they contributed along with the navigation voices they recorded and shared.

 

It’s hard to overstate the power of the kind of customer connection TomTom achieved with the TomTom Live service. In effect, TomTom solved the challenge of map updating years before any other organization in any other segment had come up with an answer - with the exception of server-based solutions. In the most recent earnings call, the company says it intends to offer map updates on a 48-hour cycle, instead of the industry-standard quarterly updates – once again, setting an industry standard.

 

TomTom continued to build momentum – let’s call it “mojo” - by capitalizing on the critical importance of traffic and routing applications adding its HD Traffic and IQ Routes enhancements. The company led the way in connected PNDs claiming 900,000 units sold in the past fiscal year and laying claim to 400,000 combined paying or on-trial-period subscribers, admittedly below company objectives.

 

But something fell apart in the past year. Evidence of the performance shortfall included the inability to successfully convince a sufficient number of consumers to pay 10 Euro/month for traffic data, even if it was demonstrably superior to competing traffic data. But the one-two punch of flattening sales and declining ASPs in 2009 have combined to deflate TomTom’s (and Garmin’s) prospects forcing the company to turn more aggressively toward non-PND sources of revenue including embedded and smartphone-based solutions.

 

Both Garmin and TomTom reported tepid financial results two weeks ago and offered cautious forecasts for flat PND sales in 2010. Both Garmin and TomTom attempted to dismiss to some extent the impact of smartphone-based navigation solutions. TomTom, in particular, claimed the three different navigation platforms – embedded automotive, smartphone and PND – are not “mutually exclusive” and “somehow strengthen each other.”

 

Both Garmin and TomTom are targeting mobile applications with TomTom making its traffic solution available for the iPhone along with an iPhone mounting kit for in-vehicle use – a wise strategy of embracing rather than confronting competition. Both companies are also pursuing automotive opportunities with TomTom’s most recent design wins coming at Renault and Fiat. Interestingly, Fiat showed new TomTom solutions at the Geneva Motor Show while also showing a mobile phone mount concept from Magneti Marelli for Nokia navigation phones.

 

Very much overlooked in TomTom’s run up to its dominant position in the European PND market was the company’s offering of a software developer kit. But the company abandoned the open platform approach in 2005, while driving innovation almost entirely internally along with some targeted acquisitions.

 

TomTom was first in developing a connected user community willing to correct map data and POIs and share favorite routes and voices. These users also demonstrated that there was a market for content that could be downloaded to TomTom devices. Sound familiar? This is exactly the model adopted by most major handset makers in the past year following the wildly successful Apple iPhone.

 

The big difference between these handset makers and TomTom is that smartphones are based on open platforms for which independent software developers can create new applications. It probably isn’t too late for TomTom to change its approach to the market, opening up its platform to third-party content and application developers. This could well be the key to turning around the bleak numbers reported in the most recent quarter.

 

A growing range of new applications from third-party suppliers can add functionality and value to a TomTom device over time, in contrast to the usual perceived decline in value over time of a typical consumer electronic product. Apple, Google and others are demonstrating daily that there is mojo in open platforms. It’s not too late for TomTom to dial in.


February 16, 2010 20:02 rlanctot
CSR is capitalizing on the strength of its GPS line up acquired from SiRF to garner automotive segment wins for its Bluetooth and Wi-Fi solutions, according to the company’s latest earnings report. In its fourth quarter and full year earnings report last week, CSR reported a revenue increase of 149% for its automotive and PND segment. With the addition of SiRF, the combined automotive and PND division now accounts for 21% of total company revenue vs. 7% in the prior year. CSR said fourth quarter demand was strong as a result of the increasing volume of new cars being built and a general move to embed more connectivity and location technologies in those new cars. CSR, which is better known for its dominant position in the handset Bluetooth market, claims combined Bluetooth and GPS leadership in the automotive market. The company also noted it had secured a design-win at a Tier 1 automotive supplier for its latest generation Wi-Fi, the UF6000. The company noted weak PND demand in Europe and the U.S. which was compensated for by increased levels of demand in the Far East and the developing world. CSR announced a design-win for a leading North American electronics manufacturer’s new connected PNDs where CSR is providing both GPS and Bluetooth. In Europe, CSR secured a design-win with Vincotech for new GPS modules and telematics product platforms. CSR says its SiRFPrima high-end SoC platform focused on the in-dash automotive market also received two design-wins in China expected to lead to significant volumes. Overall, CSR says its has begun mass production and shipping of its Wi-Fi/BT/FM connectivity platform; a GPS design win for a N. Am. smartphone maker; and BT and FM design wins for Tier One handset makers. CSR sees “positive trends” in the adoption of wireless connectivity technologies by the automotive sector.  Many vehicles already feature Bluetooth and GPS and the company believes Wi-Fi is a next step. The most important development for CSR in 2009 was that automotive emerged as a substantial third market segment, picking up slack from the company’s audio and consumer segment which saw revenue nearly halved during the year. CSR is now poised to leverage its complete wireless portfolio of Bluetooth, GPS, FM, NFC and Wi-Fi to address emerging automotive opportunities. For additional Strategy Analytics perspectives on in-vehicle connectivity: Global Automotive Vehicle-Device Connectivity Forecast 2008-2016 - http://www.strategyanalytics.com/default.aspx?mod=ReportFormatsViewer&a0=5289 Vehicle-Device Connectivity to Drive Adoption of CD-Less Systems - http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5293


January 13, 2010 10:01 rlanctot
Motorola brought an impressive new connected portable navigation device to the Consumer Electronics Show last week. It is the first unit built around Airbiquity's in-band modem technology which enables a variety of first-time connectivity features on a PND. And the user interface offers some unique elements worthy of emulation by competitors as well. In the end, however, despite having conquered technology challenges in bringing this innovative device to market, the greatest challenge facing Motorola when the product becomes available later this year, will be gaining shelfspace position at retail in a consolidating segment. The first-time list of features on the Motonav TN700 includes a wide-screen 5.1" display, Bing411 voice-enabled business search, Caller ID for announcing in-bound callers, a scrolling list of POIs that appears on the left hand side of the screen as they are passed by the device, speed camera alerts from Cobra (a capability beginning to show up on other new PNDs), and direct entry of addresses (ie. street number, name, etc.). The Airbiquity in-band modem enables the inclusion of a bundle of services called MotoExtras - free for the first 3 months - including weather, gas prices, flight status, etc. Google Search is also accessible for locating POIs. Traffic data is provided by Navteq free for the life of the device as part of Traffic.com's ad-supported business model. The price of the device has not yet been set, but will likely be in the mid- to high-end range. The speed camera data and MotoExtras will be subject to annual subscription and bundling offers both yet to be determined. The real challenge for Motorola, though, will be gaining a foothold in retail stores where Garmin and TomTom have been adding SKUs to their assortments pushing aside second and third tier brands. According to one industry assessment, the two brands account for 63% of all retail shelfspace, up from 55% a year ago. Motorola currently has 1.8% share in the U.S. Further complicating Motorola's retail ambitions is the low-end orientation of the PND market, with as much as 75%-80% of sales coming from entry-level models, the expected re-emergence of Magellan and Mio later this spring, and Best Buy's ongoing ambitions in the connected PND segment. Related content: Connected PND Database: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5213 Automotive and Portable Navigation Forecast: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4785

January 12, 2010 20:01 mfitzgerald
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

December 31, 2009 19:12 rlanctot
WIth thWith the latest tale of navigation devices gone bad (http://bit.ly/4W90kQ), one is forced to ask this question. How does one know if the maps (and navigation) on a particular device are any "good?" With more, not fewer, companies creating navigable maps, this question is more critical than ever. And the race to bring less expensive navigation devices and systems to the market has opened the door to alternative soutions. Maps used to be the sole domain of companies such as Navteq and Tele Atlas – and a few dozen other companies around the world – that actually drove and physically surveyed the roads at the ground level. These companies added layers of detail and higher degrees of accuracy as time progressed. These maps weren’t perfect and they still need regular updating, but they established a high enough expectation with consumers that millions of people were willing to buy navigation devices and faithfully follow them into, in some instances, into ponds and to incorrect destinations. Now, Google has gotten into the truck driving game along with companies such as Facet Technology. OpenSourceMaps (OSM) and CloudMade have introduced crowd-sourced maps as has Waze. GeoEye has brought satellite-sourced Google Earth to life. And Intermap is creating road data based on airplane flyovers. With the first OSM-based PND due in Germany in Q1, and Google decoupling from Tele Atlas in the U.S., and Audi showing Google Earth-enhanced navigation in the 2011 A8, is the value of road-driven maps being diminished? Device makers and consumers will soon be forced to decide for themselves what constitutes a good enough map. As 2009 fades into 2010 it is suddenly unclear whether Navteq and Tele Atlas will maintain their status as the gold standard for mapping or whether individual alternative mapping approaches or some combination will create a new industry standard. Navteq's recent agreement with Microsoft suggests the company will make a rigorous defense of its market position in pursuit of proliferating location-based market opportunities. Tele Atlas' ace in the hole remains the TomTom Home application with its community-based map correcting and updating. Hopefully 2010 will bring fewer tales of people driving into ponds.