QNX Software Systems has more or less quietly taken control of the luxury car market for embedded infotainment operating system software and, increasingly, application-level software in the head unit as well. The month-long, nationwide tour coordinated with Alcatel-Lucent to show off the now-famous LTE-enabled Toyota Prius has sent a clear message that QNX has tomorrow’s automotive infotainment solutions ready today.
The LTE implementation shows QNX at the peak of its game. In fact, QNX and Microsoft virtually pushed VxWorks out of the automotive operating system market and the two are virtually unchallenged aside from M-itron, which is dominant among Asian OEMs. Could QNX be poised for further gains or is the company’s position more vulnerable than it seems?
The demonstration of the LTE car, most recently featured at the Rock Financial Showplace in Novi, Mich., reveals an in-dash system with two front-seat screens along with back-of-headrest screens for rearseat entertainment. As a concept demonstration, the vehicle of course violates existing limitations on frontseat, in-dash video, but the point is that virtually any kind of audio, video or game content is available via any screen each of which can be personalized to the passenger in that position.
The basic options displayed in the demos are Games, Communications, Internet, Entertainment, Vehicle and Navigation. Of course, these six choices could be whatever the developer prefers and users are able to customize the sub-directories as they would radio stations. For example, within Internet the options include: Chumby, Browser, Fanbase, Home Control, Internet Video, Kabillion, Weather, YouTube, QStore, Pandora and Local Search. A similar rich mix of options is available under vehicle where QNX has realized the vision of the virtual user manual with vehicle schematics tied to on-board sensors. And, of course, QNX has enabled several on-board application stores.
There are several implications to the QNX design. First of all, the system is a cloud-ready solution. A vehicle equipped with the QNX software is location aware, capable of tapping into the Internet for its information needs or the information needs of the driver and/or connecting with the driver’s phone to access contact or scheduling information. Secondly, the QNX system shows how comprehensive connectivity almost completely obviates the need for a call-center-type telematics service provider. The driver can access almost anything he or she needs via voice commands and the vehicle, with appropriate software enhancement, is capable of anticipating or responding to most requirements.
Lastly, the LTE demonstration is a warning to auto makers that emerging network deployments may be closer than they appear in their rearview mirror. Verizon says that by 2013 its LTE network deployment will be equivalent to its 2009 3G deployment - ie. nearly ubiquitous. Those modules may be expensive, but they’re coming fast and those prices will fall correspondingly.
Enabling this level of functionality is QNX’s so-called abstraction layer of software for Alarms, Audio, SOS, Phone, GPS, Net and CAN. This abstraction layer acts as an interface between the embedded systems and the application layer. The applications “subscribe” to the objects in the abstraction layer which receive their updates from the embedded software.
The only bad news for QNX is that this LTE solution is ill-suited for the volume segment of the automotive market. While QNX has taken charge of the high end of the market, the high end of the market is characterized by low margins and low volumes. Microsoft, another contender for luxury segment business, has made a name for its self in the volume segment of the market where both margins and volumes are superior. The question facing QNX is whether it can leverage its high-end success with mass market solutions. Given the fact that it is already well positioned with relationships with key players such as Hyundai and Volkswagen prospects are positive. But with a swarm of small cars hitting the market it is likely that Microsoft is better positioned to benefit the most from emerging opportunities.
In spite of the elegance of the LTE showcase, QNX is an industry shark that needs to find a way to swim like a minnows. If there is a segment(s) on the rise it is A/B.
