HMI Innovations, Integration of Third Party
Cloud Apps and User Analytics will Define Key
Focus Areas for OEMs
June 2013
Frost & Sullivan Presentation
By
Praveen Chandrasekar
Research Manager
248-536-2008
What’s Happening in the Infotainment and HMI Area 3
Changing Telematics Value Proposition 18
Key Conclusions 25
Quick Glimpse of Connectivity
Still lags the usual suspects when it comes to new car purchase
Still good to have and not must have All OEMs are behaving very similar in terms of offering
Successful OEMs are good at packaging & marketing
Focus shifting on long term value derived through connectivity
Smartphone has a key role to play – e.g. Kia UVO eservices
Optional offer no longer a viable strategy
Vehicle Purchase Influencers - EU & US
Clearly Infotainment and Connected Technology will never be a top purchase influencer, but how it can influence the overall car technology will be key
Driver Distraction Issues
Research indicates that even voice usage causes distraction. Clearly HMI as much as a
differentiator is a big challenge for OEMs to get right in line of growing distraction possibilities
Complex Graphics & Menu Structures
Display in Line of Sight?
App Certification & Distraction Guidelines
Content & Control - On the move vs. static?
SIRI Vs. Native VR How to Control?
less than 6", 28% 6.5"-7", 45% More than 7", 27% less than 6", 50% 6.5"-7", 40% More than 7", 10%
Central Display Split by Size (Europe), 2012 Central Display Split by Size (Europe), 2018
less than 6", 8% 6.5"-7", 51% More than 7", 41% less than 6, 16% 6.5"-7", 57% more than 7", 27%
Central Display Split by Size (North America), 2012 Central Display Split by Size (North America), 2018
Central Display Size Analysis
10 inch plus central display screen sizes will increasingly penetrate the North American market with average sizes exceeding 7 inches
Younger age group ownership of Smartphone is increasing by
the year – this is no secret!
18-24 25-34 2012 2013 Smartphone Ownership by Age, US 67% 76% 65% 75%
Smartphone Ownership
More than half of the Adult American society owns a smartphone and replacement is currently averaging at less than 2 years for a more powerful new phone
The only age group where ownership is flat over the years
is 65+ - UNDERSTANDBLY!
Increasing amount of Mobile Payments & Banking Use in Smartphone Owners
Constantly Checking Smartphones for Updates- More than 60%
Recent court ruling in California reinforces Dangerous Smartphone use while Driving
Average of 35-40 Texts Sent During the Day from Smartphones
75% of Smartphone owners access social networking through mobile atleast once a day
Frequency of Smartphone Usage In the Vehicle
40-50% of all customers across segments use their Smartphone inside the car regularly through several means
Base: All respondents (n=1,524).
Q7B. When in your vehicle, how often do you use your smartphone? 23% 16% 17% 17% 19% 35% 40% 27% 29% 24% 25% 25% 29% 30% 29% 33% 36% 31% 33% 24% 16% 21% 22% 23% 27% 23% 12% 14% Total sample Non-luxury SUV/CUV D&E A, B & C MPV & pickup trucks Luxury car Luxury SUV/CUV
Frequency of Smartphone Usage in Vehicle by Vehicle Segments United States, 2012
Always Often Sometimes Never
19% 19% 20% 20% 26% 40% 49% 52% 74% 17% 12% 15% 17% 15% 13% 20% 9% 12% 13% 8% 10% 9% 9% 7% 9% 4% 5% 6% 8% 7% 6% 5% 6% 2% 18% 7% 9% 8% 4% 6% 2% 2%
Use seat controls Listen to music, news, etc. on my smartphone Make calls on cell phone to business associates Listen to my MP3 player/ iPod Call hands free using a vehicle system Send/receive text messages on your phone Make calls on cell phone to friends and family Open your garage door or community gate Listen to the radio
Frequency of Performing Various activities in Vehicle United States, 2012
Daily 2-3 times a week Once a week 2-3 times a month Once a month Less than once a month
Base: Filtered respondents (n=1,435)
Q5. How frequently do you do the following activities in your vehicle?
Note: Proportions less than five percent are not shown numerically in the chart.
Activities that Consumers Frequently Do in the Vehicle
Several of the top 10 most frequently done activities by US customers relates to using the Smartphone in one way or another
Developers =? = Volume Vs. Niche OEMs?
Ford MS SDK GM HTML 5 Tweedle Connect Mirror Link High Volume Android Sphone Support MirrorLink By Handset Vendor MirrorLink 1.1 App certification With dedicated driver distraction Guidelines By OEMS MirrorLink 1.1 OEMs need Not worry About IT costs& Apps for diff Markets
By CCC
MirrorLink 1.1
App SDK War
MirrorLink 1.1
Smartphone & App Integration
MirrorLink 1.1 with its new areas of focus around driver distraction guidelines, app certification with developers might be the answer 60% of OEMs are looking for to integrate apps
And what about Apps?
There is clear evidence that several of the usual category of apps have very interest and usage both inside and outside the car
Base: All respondents (n=1,524).
Higher volume of usage is reported by users for social networking, free nav and internet
OEM App Program No of Apps Point of Sale Paid Vs. Free Apps
Revenue Model Development Style
Ford Applink >40 <5% Paid SYNC W/HMI
Options
Direct with Developers
Chevrolet MyLink 10+ 1 Paid App –
BringnGo
MyLink W/HMI Options
Direct with Developers
Volvo Sensus 10 All Free Apps Sensus Connected
Hardware W/HMI
Parrot OEM App Store
BMW Connected
App
10 1 Paid- MoG User
Account
iDrive+Display Direct with Developers Audi Audi Connect 6 Embedded Covered under $30
Monthly LTE plan
MMI Touch+Display
Direct with Developers Chrysler UConnect 4 (not
available yet)
All Free Apps Uconnect System W/HMI Options
Direct with Developers
Cadillac CUE 2 Linux
Embedded
Pandora Free CUE System W/HMI Options Direct with Developers Mercedes Benz MB App Shop
10 Plus 3 Paid Apps-
10E/App MB Store
COMAND ONLINE Direct with Developers
Toyota Entune 5 $5 access fee per
month for apps after 3 years trial
Entune HW/W/HMI
Tweedle Connect Hyundai Bluelink 2 Part of Bluelink Bluelink Package Agero - Bluelink
NA Automotive App Stores Recap
Ford remains the biggest in this space, but still no clear revenue streams from apps directly. All OEMs acknowledge app effort is to create customer loyalty and chance to sell cool HW
Ford SYNC Applink
Ford offers the largest app collection with majority existing popular free apps. Missing elements are driving & service related apps. Also Applink not available with MyFordTouch
Ford App Store Highlights
Program Applink
Availability 2013 Focus , Fiesta, E-series,
Expedition, F-150, Super Duty, C-MAX, Fusion and Mustang
Revenue Model SYNC Hardware W/Voice/Steering Wheel Controls/Bluetooth
Apps Point of Sale Apple/Android/BB Stores
Free Apps 95%
Paid Apps 5% - e.g. Amazon Cloud Player – user
continues his existing account
Communication Tethered from User Data Plan Key Partners Microsoft and App Developers
Development Type Closed proprietary – Developers tweak SDK to SYNC API
New Open SDK Approach Announced
Ford also contributing Applink code to GENIVI
for other OEMs
Types of Apps
21 different Radio & Music
Apps
5 Different Nav Apps including Glympse
location sharing
2 Sports Apps 8 News Apps
Volvo Sensus Connected Touch Program
Volvo has direct partnership with Parrot and uses its Android app store called Asteroid and also has a direct partnership with Ericson to use its connected cloud, complete outsourcing
Volvo App Store Highlights
Program Sensus Connected Touch
Availability
Option Accessory - V40, V40 Cross Country, S60, V60, XC60, V70, XC70 and S80
Retrofit for Certain 2011 Models
Revenue Model HW+HMI Options+3G/4G Dongle
Point of Sale Google Play Android Market
Free Apps Spotify, TuneIn, Deezer, iGo, etc.
Paid Apps Coyote App (EU Specific)
Communication Choice of dedicated 3G/4G
Dongle or Users Smartphone
Key Partners Ericson/Parrot/ Neonode
Development Type App framework completely
outsourced to Parrot
Utilizes Parrot’s BT enabled Smartphone link to replicate/mirror
apps to the display
Partnership with Neonode to utilize a
new infrared beam touch screen multi-sensing environment
HTML 5 browser+Java script for full internet access when vehicle is
not in motion
More OEMs are moving towards a model of outsourcing app stores
to third parties, e.g. Renault ATOS, Volvo Parrot
Carminat TomTom was
essentially a rebuilt TomTom One where the key was the
ecosystem partners ability to keep costs down
5.8” colour screen
Joystick Remote control Speech to text
HMI Options
• Carminat TomTom Live costs €490. • All models come with a three month free
subscription of live services.
• Post free trial Live services are charged
at €145 for 3 years.
• Additional European mapping for long
distance travel is available for €120.
Renault TomTom – Carminat followed by R-Link
R-Link is an example of OEM+Third party (ATOS) development – however the closed development based on Android will strain the customers pocket
Dedicated App Store – 20 Apps available BT Streaming + Portable
Device Connectivity Navigation+Telephony Vehicle Related Services
7 Inch Touch Screen Display
Voice Recognition- 9 Languages
3 months free access to TomTom and Coyote
Services
6 Months Free access to email, R-Link Tweeet, Weather and
Roadside Assistance (Covered by TTS)
Discovery pack access to select apps for 6 months 590E Option
on Select Models
Apps pricing expected to be between 5 to 50 Euros (e.g.
Preferred HMI Type by Application for D&E Segment
Multimodality is preferred with a combination of touch, voice and steering wheel controls
13% 14% 14% 26% 9% 12% 12% 21% 26% 11% 13% 12% 11% 7% 15% 16% 14% 16% 13% 15% 12% 29% 14% 11% 17% 10% 9% 9% 9% 16% 17% 16% 7% 28% 7% 15% 21% 13% 14% 14% 14% 9% 13% 19% 14% 18% 13% 14% 8% Voice recognition
Touch screen Single dial knob Steering wheel controls Touchpad and handwriten recognition Specific physical buttons Joystick Operating features and
apps built into vehicle Operating features and apps from smartphone Climate control
operation Hands-free telephony/texting Portable device operation (iPod, etc.) Navigation system operation
Entertainment system operation
Base: All respondents (2012, n=1,592).
Q19. If the following was available in your vehicle, please indicate how you would prefer to control each function. Note: Proportions less than five percent are not shown numerically in the chart.
Telematics and Infotainment Market Outlook: Preferences for HMI Controls by Application Type, Europe, 2012
What Future HMI Tech are Customers Interested In?
Interest is very high in natural voice recognition and capacitive touch screens which is a direct result of their CE device interaction
Base: All respondents (n=1,524).
Q21. Please indicate your interest in the following future control options if available in your next vehicle by indicating the price that you would be willing to pay.
$64 $59 $53 $104 $64 $68 $77 $53 $108 $175 $178 $156 $210 $195 $70 $82 $56 $130 $87 $148 $148 $151 $205 $211
Touch screen with haptic feedback
Proximity sensing Multi-touch gesture recognition
Natural speech recognition
Capacitive touch screen A, B & C D&E Luxury car Non-luxury SUV/CUV Luxury SUV/CUV
Source: Frost & Sullivan analysis. Telematics and Infotainment Market Outlook: Willingness to Pay for Future HMI Technologies, US, 2012
Key Areas of Focus
Opportunity here is to capture the customer spending post the 3 years bumper to bumper warranty at OEM dealerships. This needs a longer term valuable relationship and rich data
A slight decrease in warranty costs and increase in long term parts and sales adds billions to the OEM balance sheet in terms of
margins
VRM is Essential to Capture that Long Term Opportunity
A multi-pronged strategy which OEMs are addressing in small steps today. Key step though is bringing high bandwidth communication and longer so called free access periods
Over the Air Updates
Remote software management Already in motion from several OEMs Predictive Maintenance & Diagnostics Advanced understanding of
faults & issues
Warranty costs reduction and key PD data Dynamic Service Scheduling/Reminder System In-vehicle service scheduling Several OEMs moving fast in this space Increased Customer Satisfaction Advanced recall notification Support customers over lifecycle
Key is doing this over the vehicle lifecycle – meaning longer
exposure time needed with the customer
What's the Ecosystem Like?
Key technology enablers with capabilities to do remote software management over the cloud and innovations like in-vehicle service scheduling will be the key in this space
Over the Air Updates Management Service Scheduling Companies Big Data Analytics Capabilities Vehicle Manufacturers Dealers Customers
T
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Enabl
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Which OEMs are Leading the Way
Hyundai and Kia are defining the ideal use case strategies with Kia taking the extra step in having a smartphone based eServices app that can be upgraded easily
Criteria
Free Trial Period
6-12 Months
1 Year 3 Years 3 Years 10 Years Lifetime 3-6 Months Safety SOS. Roadside SOS. Roadside SOS SOS. Roadside SOS. Roadside SOS SOS. Roadside
Security Yes Yes No Yes Yes No Yes
Vehicle Health Reports
Yes No Yes Yes No Yes No
Preset or Detected Maintenance
Alerts
Yes No No Yes No Yes No
Auto Diagnostic Fault Detection
Yes No No Yes No Yes No
Auto Recall Notifier No No No Yes No No No In-Vehicle Service Scheduling No No No Yes No No No
Hyundai – Taking a Giant Leap
A large portion of the Hyundai strategy rests on the features enabled by the Bluelink connected platform that captures the most essential diagnostics and performance data
Best in Class Powertrain Warranty • 10 year/100 k Miles Bluelink Connected Car Services • 3 years free for equipped vehicles Roadside
Assistance • 5 years unlimited
Free Service Period • 3 year multipoint free inspection
Kia UVO eServices
eServices is a breakthrough approach by Kia which has functionalities on par with the Hyundai solution but is more long term sustainable because of the Smartphone approach
Kia Highlights
Program UVO first gen+ eServices Suite
Availability Most MY2014 models
Revenue Model • Complete UVO solution/Hardware
• Long term warranty costs
savings/incremental service and dealer involvement
Point of Sale eServices Free App download from APP
STORES
App Price Free
Key Benefits - No additional costs for the app or
communication, lowest cost implementation in the market
- Most easy solution to upgrade/update over vehicle lifecycle because of the app nature
Key Partners Microsoft, Hardware Partners
Similar Market Approaches
GM MyLink BYOD (only Navigation), SYNC (Only entertainment apps)
Kia is only OEM with Diagnostics+VRM approach through Smartphone App
Aftermarket has witnessed some implementations like
this –Delphi Verizon on-board unit + Smartphone
Biggest area OEM need Assistance is selling and
packaging services
Proactive diagnostics will be a key feature- enable OTA
update features
Bring the Smartphone as a key enabler of apps/VRM
and other services
Support OEMs with solutions that shares performance and
vehicle data with dealers
User data- another area where OEMs need support to define what needs to be done
Embedded Modem Vs. Tethering – Another key area which needs to be evaluated by
application area
UX is another key area which is creating fast user reaction,
Critical for USP for OEMs
Key
Opportunities
Key Conclusions and Opportunities
Creating value out of connectivity needs to be looked at over a long term perspective – this is an area where OEMs need support to develop state of the art services
Contact Information
Praveen Chandrasekar
Research Manager, Telematics & Infotainment (+1) 248.536.2008
